Required

Prepare journal entries to record these transactions and events.

Problem $7-2$A Estimating and reporting bad debts P$2$ P$3$

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

Cash sales $$1,905,000$

Credit sales $5,682,000$

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

Accounts receivable

$$1,270,100$ debit

Allowance for doubtful accounts

$16,580$ debit

Required

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

a$.$ Bad debts are estimated to be $1\mathrm{.}5\%$ of credit sales.

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

c$.$ An aging analysis estimates that $5\%$ of year$-$end accounts receivable are uncollectible.