From inception of operations to December 31, 2017, Headland Corporation provided for uncollectible accounts receivable under the allowance method. The provisions are recorded, based on analyses of customers with different risk characteristics. Bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account, and no year-end adjustments to the allowance account were made. Headland’s usual credit terms are net 30 days.

The balance in Allowance for Doubtful Accounts was $148,300 at January 1, 2017. During 2017, credit sales totaled $9,038,300, the provision for doubtful accounts was determined to be $180,766, $90,383 of bad debts were written off, and recoveries of accounts previously written off amounted to $18,290. Headland installed a computer system in November 2017, and an aging of accounts receivable was prepared for the first time as of December 31, 2017. A summary of the aging is as follows.

Based on the review of collectibility of the account balances in the “prior to 1/1/17” aging category, additional receivables totaling $58,800 were written off as of December 31, 2017. The 84% uncollectible estimate applies to the remaining $93,100 in the category. Effective with the year ended December 31, 2017, Headland adopted a different method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable.

 
 

Prepare the journal entry for the year-end adjustment to the Allowance for Doubtful Accounts balance as of December 31, 2017. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
  

Classification by Month of Sale Estimated % Uncollectible Balance in Each Category November-December 2017 $1,110,400 2% July-October 660,900 10% January-June 422,300 24% Prior to 1/1/17 151,900 84% $2,345,500