At the beginning of 2004, AB Tech Company's Accounts Receivable balance was $110,000, and the balance in the Allowance for Doubtful Accounts was $2,500. AB Tech's sales in 2004 were 1,000,000, 80% of which was on credit. Collections on account during the year were $600,000. The company wrote off $6,000 of uncollectible accounts during the year.

1.) Determine the effect on AB's accounting equation of the estimate of bad debts assuming bad debt expense is 2% of credit sales. Also, prepare the journal entry.

2.)Determine the effect on AB's accounting equation relative to the write offs of accounts receivable during 2004. Also, prepare the journal entry.

Im having trouble figuring out where to start, and im lost. Can anyone help please?