During its first year of operations, Spring Garden Plans earned net credit sales of $$340,000.$ Industry experience suggests that bad debts will amount to $3\%$ of net credit sales. At December $31,2025,$ accounts receivable total $$36,000.$ The company uses the allowance method to account for uncollectibles.

Read the requirements.

Requirement $1.$ Journalize Spring Garden Plans' Bad Debts Expense using the percent$-$of$-$sales method. $($Record debits first, then credits. Select the explanation on the last line of the journal entry table.$)$

Requirement $2.$ Show how to report accounts receivable on the balance sheet at December $31,$

Balance Sheet $($Partial$)$:

Current Assets:

Requirements

Journalize Spring Garden Plans' Bad Debts Expense using the percent$-$of$-$sales method.

Show how to report accounts receivable on the balance sheet at December $31,2025.$