E7-7B (L03) (Recording Bad Debts) Rodriguez Company reports the following financial information before adjustments.

Debits Creditsv $25,000- Accounts Receivable Allowance for Doubtful Accounts Sales (all on credit) Sales Retums and Allowances 12,500 $500 225,000- Instructions Prepare the journal entry to record Bad Debt Expense assuming Rodriguez Company estimates bad debts at (a) 3% of net sales and (b) 8% of accounts receivable