During the current year, Adams Assembly, Inc., recorded sales of $130,000,000. Based upon prior experience it estimates a 1 percent bad debt rate on credit sales.

Required:

Prepare journal entries for each transaction:

a. On September 29 of the current year, an accounts receivable for $4,000 from March if the current year was determined to be uncollectable and was written off.

b. The appropriate bad debt expense adjustment was recorded for the current year.