The balance in accounts receivable for Toyland Company as of 12/31/20 is $300,000 and the allowance for doubtful accounts has a debit balance of $400. The estimate of uncollectibles is made by taking 4% of gross accounts receivables.

A) Prepare the year-end adjusting entry to record the bad debts.

B) Prepare the year-end adjusting entry to record the bad debts (assume the current balance in allowance for doubtful accounts is a $400 credit balance).