Problem $7-2$A $($Algo$)$ Estimating and reporting bad debts LO P$2,$ P$3$

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$[$The following information applies to the questions displayed below.$]$

At December $31,$ Hawke Company reports the following results for its calendar year.

Cash sales $ $400,000$

Credit sales $ $1,000,000$

In addition, its unadjusted trial balance includes the following items.

Accounts receivable $ $300,000$ debit

Allowance for doubtful accounts $ $3,600$ debit

Problem $7-2$A $($Algo$)$ Part $1$

Required:

$1.$ Prepare the adjusting entry to record bad debts under each separate assumption.

Bad debts are estimated to be $2\%$ of credit sales.

Bad debts are estimated to be $1\%$ of total sales.

An aging analysis estimates that $6\%$ of year$-$end accounts receivable are uncollectible.

Adjusting entries $($all dated December $31).$