On its December 31, 2014 year end, Rainbow Appliances has $300,000 in Accounts Receivable. Historically, about 3% of year end Accounts Receivable end up going bad based upon the previous 3 years actual average experience.

1. Assuming Rainbow uses the Percentage of Accounts Receivable technique in estimating its Allowance for Bad Debts, prepare the adjusting entry required at December 31st 2014
2. Assume that in April of 2015 one of Rainbows customers (Mr. Jones) goes into bankruptcy and reports that he cannot pay his $500 balance owing. Prepare the journal entry to reflect this event.
3. Assume now that Mr. Jones unexpectedly contacts Rainbow in June 2015 wanting to pay $250 of his previously written off balance. Prepare the required journal entries to record this event.