Shenzhen Co uses the percentageofreceivables basis to record bad debt expense It estimates that 1 of accounts receivable will become uncollectible Accounts receivable are 420,000 at the end of the year, and the allowance for doubtful accounts has a credit balance of 1,500.

(a) Prepare the adjusting journal entry to record bad debt expense for the year.

b) If the allowance for doubtful accounts had a debit balance of 740 instead of a credit balance of 1,500, determine the amount to be reported for bad debts expense.