Fife Company has the following account balances at December 31 of the current year: Accounts Receivable $42,400 and Allowance for Doubtful Accounts $1,600 (credit balance). Fife uses the aging of accounts receivable to estimate bad debts. The following aging schedule reflects the situation at year-end:

Required: (1) Calculate the amount of the Allowance for Doubtful Accounts that should appear on the December 31, current year, balance sheet. (2) Prepare the journal entry to record bad debts expense for the current year.