Splish Brothers inc. sells office equipment and supplies to many organizations in the city and surrounding area on contract terms of $\frac{2}{10},\frac{n}{30}.$ In the past, over $75\%$ of the credit customers trave taken advantage of the discount by paying within $10$ day $5$ of the invoice date.

The number of customers taking the full $30$ days to pay has increased within the last year. Current indications are that less than $60\%$ o the customers are now taking the discount. Bad debts as a percentage of gross credit sales have risen from the $2\mathrm{.}5\%$ average inpast years to about $4\mathrm{.}7\%$ in the current year.

The company's Finance Committee has requested more information on the collections of accounts receivable. The controller responded to this request with the following report.

Proportion of Total

$\backslash$table$[[60\%,$not yet due$],[22\%,$less than $30$ days past due$],[9\%,30$ to $60$ days past due$],[5\%,61$ to $120$ days past due$],[2\%\%,121$ to $180$ days past due$],[1\%\%,$over $180$ days past due$]]$

Probability of Collection

$98\%$

$96\%$

$94\%$

$91\%$

$759$

$30\%$

Allowance for Doubtful Accounts had a credit balance of $$27,000$ on June $1,2019.$ Splish Brothers has provided for a monthly bad debt expense accrual during the current fiscal year based on the assumption that $4\mathrm{.}7\%$ of gross credit sales will be uncollectible. Total gross credit sates for the $2019-2020$ fiscal year amounted to $$2\mathrm{.}900,000.$ Write$-$offs of bad accounts during the year totaled $$103,000.$

Prepare the necessary journal entry to adjust the accounting records. $($Credit account titles are automatically indented when th amount is entered. Do not indent manually.$)$

Account Titles

Debit

Credit