DebitCredit

Accounts receivable$140,000

Allowance for doubtful accounts730

Sales$610,000

Sales returns and allowances8,000

Prepare the journal entries for allowance for doubtful accounts when the estimate of uncollectible accounts is determined by taking 1) 5% of gross accounts receivable and 2) 3% of gross accounts receivable with a $730 debit allowance account balance.