SolarWat, an Israeli energy company, builds specially designed solar panels. The solar energy produced by these panels is used in farming. The company started the year with the following accounts receivable position:

SolarWat uses the Allowance Method in accounting for its Accounts Receivable.

During the year, Agro-Shelef, a customer who buys solar panels from SolarWat, was devastated by an unusually severe storm. At that time, SolarWat concluded that it was highly unlikely that Agro-Shelef would ever be able to pay its outstanding balance of $165,000 of receivables. This balance was accordingly written off. Much later in the year, Agro-Shelef was rescued by a group of investors who offered to pay SolarWat $110,000 toward the unpaid balance provided SolarWat would permanently forgive the other $55,000 of balance and resume selling solar panels to Agro-Shelef. SolarWat agreed and has since resumed doing business with Agro-Shelef.

During the year, sales on account amounted to $25,689,000. Collections on account totaled $21,300,500 (excluding the collection made from Agro-Shelef's investors).

Also during the year, accounts written off (not including the Agro-Shelef transaction) were $135,000. At year's end, a detailed analysis of accounts receivable was performed, and management estimates 4.5% of its outstanding accounts receivable to be uncollectible.

Prepare the journal entries. Round answers to the nearest dollar.

Accounts receivable $ 12,500,000 Less: Allowance for doubtful accounts (465,000 $ 12,035,000 To record collections on account (excluding the collection from Anatolia Agro) Account Debit Credit