Credit Losses Based on Accounts Receivable

Hunter, Inc., analyzed its accounts receivable balances at December 31, and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectible:

Age Group	Balance	Probability of Noncollection
030 days past due	$90,000	1%
3160 days past due	20,000	2%
61120 days past due	11,000	5%
121180 days past due	6,000	10%
Over 180 days past due	6,000	25%
	$133,000

The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $820 on December 31, before any adjustments.

1. Prepare the adjusting entry for estimated credit losses on December 31.
2. Prepare the journal entry to write off the Rose Companys account on April 10 of the following year in the amount of $650.