Simmons Company uses the allowance method to account for bad debts. To estimate the amount of uncollectible accounts, Simmons Company uses the percentage of sales method .

A review of the end of the year accounting information finds the following:

Net sales for the year, $990,000. This includes $68,000 of cash sales; Ending balance in Accounts Receivable, $103,000; Ending balance in the Allowance for Bad Debts account, $694 (credit balance After discussions with company management, you determine that 3% of net credit sales is a reasonable estimate of uncollectible accounts. Required

Journalize the entry to record bad debts expense for the year ended December 31.