ecte creuit losses for the year by an adjusting entry. Accounts written off during this first year have created a debit balance in the Allowance for Doubtful Accounts of $61,000. An analysis of aged accounts receivables indicates that the desired balance of the allowance account should be $12,500. 31 Made the appropriate adjusting entries for interest Required Record the foregoing transactions and adjustments in general journal form. SERIAL PROBLEM: KATE'S CARDS (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters 1 through 7.) SPS. Kate has put a lot of time and effort into streamlining the process to design and produce a greet- ing card. She has documented the entire process in a Quick Time video she produced on her iMac. The video takes the viewer through the step-by-step process of selecting hardware and software, andCards shows how to design and produce the card. Kate has met many people who would like to get into the production of greeting cards, but are overwhelmed by the process. Kate has decided to sell the entire package (hardware, software, and video tutorial) to aspiring card producers. The cost of the entire package to Kate is $4,500 and she plans to mark it up by $500 and sell it for $5,000. John Stevens, an individual Kate met recently at a greeting card conference, would like to buy the pack- age from Kate. Unfortunately, John does not have this much cash and would like for Kate to extend credit. Kate believes that many of her customers will not be able to pay cash and, therefore, she will need to find some way to provide financing. One option she is exploring is to accept credit cards. She learned that the credit card provider charges a 2.5 percent fee and provides immediate cash upon receiving the sales receipts