Baker company has a credit balance of $600 in allowance for bad debts on the unadjusted trial balance. Bakers current income statement shows the following information - cash sales $30,000, Credit sales $30,000, sales returns and allowances $5,000, sales discounts $2,000. Baker estimates that the bad debts are 4% of total net sales (using the percentage of sales method). Make the entry for the year-end allowances and bad debt entry.