Sparkle Watches completed the following selected transactions during $2025$ and $2026$:

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$($Record debits first, then credits. Exclude explanations from journal entries. Abbreviations used: Adj. $=$ Adjusting entry, Clos. $=$ Closing entry, W$/$O$=$Write$-$off.$)$

Begin by recording the $2025$ transactions in the general journal.

Dec. $31$: Estimated that bad debts expense for the year was $2\%$ of credit sales of $$460,000$ and recorded that amount as expense. The company uses the allowance method.

Dec. $31$: Made the closing entry for bad debts expense.

Now record the $2026$ transactions in the general journal.

Jan. $17$: Sold inventory to Monet Jewelry, $$600,$ on account. Ignore Cost of Goods Sold.

Transactions

$2025$

Dec. $31$ Estimated that bad debts expense for the year was $2\%$ of credit sales of $$460,000$ and recorded that

amount as expense. The company uses the allowance method.

Dec. $31$ Made the closing entry for bad debts expense.

$2026$

Jan. $17$ Sold merchandise inventory to Monet Jewelry, $$600,$ on account. Ignore Cost of Goods Sold.

Jun. $29$ Wrote off Monet Jewelry's account as uncollectible after repeated efforts to collect from the company.

Aug. $6$ Received $$600$ from Monet Jewelry, along with a letter apologizing for being so late. Reinstated Monet

Jewelry's account in full and recorded the cash receipt.

Dec. $31$ Made a compound entry to write off the following accounts as uncollectible: Canadian Jewels, $$1,700$;

Vetter Vintage, $$1,400$; and Robertson Boutique, $$350.$

Dec. $31$ Estimated that bad debts expense for the year was $2\%$ on credit sales of $$520,000$ and recorded the

expense.

Dec. $31,$ Made the closing entry for bad debts expense.