Peakhurst Limited had the following trial balance at 1 January 2016:

Debit $ Credit $

Cash 200000

Accounts receivable 600000

Inventory 700000

Prepaid Insurance 60000

Prepaid rent 50000

Equipment 1000000

Allowance for doubtful debt 20000

Accumulated depreciation 200000

Accounts payable 500000

Revenue received in advance 100000

Income tax payable 500000

Loan 570000

Share capital 400000

Retained profit 320000

Total 2610000 2610000

You are given the following additional information for the year ended 31 December 2016:

a) Bad debts of $8000 were written off.

b) It was decided that allowance for doubtful debts should be 4 per cent of accounts receivable. Required:

1) Prepare journal entries for these transactions.

2) Show the T-ledger accounts for the following for the year ended 31 December 2016:

a) accounts receivable

b) allowance for doubtful debts

c) bad debts expense