Entries for bad debt expense under the direct write$-$off and allowance methodsThe following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December $31$:DateTransactionApr. $13.$Wrote off account of Dean Sheppard, $$2,470.$May $15.$Received $$1,240$ as partial payment on the $$3,290$ account of Dan Pyle. Wrote off the remaining balance as uncollectible.July $27.$Received $$2,470$ from Dean Sheppard, whose account had been written off on April $13.$ Reinstated the account and recorded the cash receipt.Dec. $31.$Wrote off the following accounts as uncollectible $($record as one journal entry$)$:Paul Chapman $$1,650$Duane DeRosa $1,240$Teresa Galloway $740$Ernie Klatt $1,040$Marty Richey $37031.$ If necessary, journalize the year$-$end adjusting entry for uncollectible accounts.If no entry is required, select $"$No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.Question Content Areaa. Journalize the transactions under the direct write$-$off method.DateAccountDebitCreditApr. $13$May $15$July $27$July $27$Dec. $31$Dec. $31$Feedback AreaFeedbackRemember that under the direct write$-$off method, Bad Debt Expense is not recorded until the customer's account is determined to be worthless.Under the allowance method once a customer account is identified as uncollectible, it is written off against the allowance account.Question Content Areab. Journalize the transactions under the allowance method. Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on past history and industry averages, $1\%$ of credit sales are expected to be uncollectible. Shipway recorded $$1,205,300$ of credit sales during the year.DateAccountDebitCreditApr. $13$