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Liang Company began operations in Year 1. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable

Liang Company began operations in Year 1. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows.

Year 1

  1. Sold $1,352,700 of merchandise on credit (that had cost $975,000), terms n/30.
  2. Wrote off $18,500 of uncollectible accounts receivable.
  3. Received $673,700 cash in payment of accounts receivable.
  4. In adjusting the accounts on December 31, the company estimated that 2.80% of accounts receivable would be uncollectible.

Year 2

  1. Sold $1,534,000 of merchandise (that had cost $1,257,100) on credit, terms n/30.
  2. Wrote off $30,000 of uncollectible accounts receivable.
  3. Received $1,214,800 cash in payment of accounts receivable.
  4. In adjusting the accounts on December 31, the company estimated that 2.80% of accounts receivable would be uncollectible.

Required:

Prepare journal entries to record Liangs Year 1 and Year 2 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system, and it applies the allowance method for its accounts receivable.)

Note: Round your intermediate calculations to the nearest dollar.

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