On December 31, 2017, Eric Companys Unadjusted Trial Balance contained the following account balances:

debit credit

.Accounts Receivable $360,000 dr

Allowance for Doubtful Accounts 7,000 dr

Sales Revenue $2,000,000 cr

Eric Company made all its sales on account.

A) Assume that Eric Company expects that 1% of its sales will result in uncollectible accounts. Prepare Eric Companys year-end adjusting entry to record Bad Debts Expense.

B) Assume that Eric Company expects that 5% of its year-end accounts receivable will be uncollectible. Prepare Eric Companys year-end adjusting entry to record Bad Debts Expense.