The Accounts Receivable balance for Lantana Company at December $31,2015,$ was $$23,000.$ During $2016,$ Lantana earned revenue of $$454,000$ on account and collected $$322,000$ on account. Lantana wrote off $$5,700$ receivables as uncollectible. Industry experience suggests that uncollectible accounts will amount to $2\%$ of accounts receivable.

Read the requirements.

Requirement $1.$ Assume Lantana had an unadjusted $$2,400$ credit balance in Allowance for Bad Debts at December $31,2016.$ Journalize Lantana's December $31,2016,$ adjustment to record bad debts expense using the percent$-$of$-$receivables method. $($Record debits first, then, credits. Select the explanation on the last line of the journal entry table.$)$