Megan's Products is undecided about which base to use in estimating uncollectible accounts. On December 31, 2015, the balance in Accounts Receivable was $680,000 and net credit sales amounted to $3,800,000 during 2015. An aging analysis of the accounts receivable indicated that $40,000 in accounts are expected to be uncollectible. Past experience has shown that about 1% of net credit sales eventually are uncollectible. Prepare the adjusting entries to record estimated bad debt expense using the (1) percentage-of-sales basis and (2) the percentage-of-receivables basis under each of the following independent assumptions:

Allowance for Doubtful Accounts has a credit balance of $3,200 before adjustment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Account Titles and Explanation Percentage-of-sales basis: Percentage-of-receivables basis