Current Attempt in Progress Majestic Equipment Sales Company, which sells only on account, had a $ 136,000 balance in its Accounts Receivable and a 54,800 credit balance in its Allowance for Doubtful Accounts on December 31, 2019. During 2020, the company's sales of equipment were $ 831,000 and its total cash collections from customers were $ 794,000. During the year, the company concluded that customers with accounts totalling $ 6,600 would be unable to pay, and wrote these receivables off. However, one of these customers subsequently made a payment of $850. (Note that this amount is not included in the cash collections noted above. At the end of 2020, management decided that it would use an estimate for bad debts of 1% of its credit sales Account Titles and Explanation Debit Credit Accounts Receivable Sales Revenue (To record sales) Cash LIT Accounts Receivable (To record cash collected from customers) Allowance for Doubtful Accounts Accounts Receivable (To write off accounts receivable) Accounts Receivable Allowance for Doubtful Accounts (To reinstate an account that were previously written off) (To reinstate an account that were previously written off) Bad Debts Expense Allowance for Doubtful Accounts (To record recovery of account that were previously written off) (To recognize the bad debts expense)