Patel Company had a $700 credit balance in Allowance for Doubtful Accounts at December 31, 2020, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following:

Estimated Percentage

Age of accounts Uncollectible

Current accounts $140,000 1%

030 days past due 95,000 5%

3160 days past due 36,000 10%

6190 days past due 12,000 25%

Over 90 days past due 8,000 50%

Total accounts receivable $291,000

a)Prepare the adjusting entry on December 31, 2020, to recognize bad debt expense.

b)Assume the same facts as above except that the Allowance for Doubtful Accounts account had a$2,500 debit balance before the current year's provision for uncollectible accounts. Prepare the adjusting entry for the current year's bad debt expense.