The accounts of Polaris Company provided following 20X5 information at 31 December 20X5.

Accounts receivable $1,899,000(dr)

Allowance for sales discounts $23,500(cr)

Allowance for doubtful accounts $134,900(cr)

Total credit revenue during 20X5 $23,589,000

Investigation showed the following.

a. Examination of aging of accounts receivable showed that accounts of $106,200 previously provided for should be written off. Of the remaining balance, $216,000 was doubtful at year end.

b. Estimated sales discounts inherent in the closing accounts receivable balance were $17,200. Terms of 1/10.,n/45 were granted to customers. Accounts receivable were gross, and the discounts taken were recorded when taken by the customers in a discounts account, reported contra to the sales account.

1. Prepare year-end adjusting entries with respect to accounts receivable and the related allowances.

2. Show how the net accounts receivable appear on the statement of financial position on 31 December 20X5.