Credit Losses Based on Accounts Receivable At December 31, the Hope Company had a balance of $608,000 in its Accounts Receivable account and a credit balance of $5,600 in the Allowance for Doubtful Accounts account. The accounts receivable T-account consisted of $619,200 in debit balances and $11,200 in credit balances. The company aged its accounts as follows:

Current $524,000

0-60 days past due 56,000

61-180 days past due 22,400

Over 180 days past due 16,800

$619,200

In the past, the company has experienced credit losses as follows: 2% of current balances, 6% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 30% of balances over six months past due. The company bases its allowance for doubtful accounts on an aging analysis of accounts receivable. Required a. Prepare the adjusting entry to record the allowance for doubtful accounts for the year. b. Show how Accounts Receivable (including the credit balances) and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet.