During its first year of operations, Winter Retreats earned net credit sales of $$361,000.$ Industry experience

suggests that bad debts will amount to $1\%$ of net credit sales. At December $31,2025,$ accounts receivable total

$$38,000.$ The company uses the allowance method to account for uncollectibles.

Read the requirements.

Requirement $1.$ Journalize Winter Retreats' 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.$)$