The December 31, 2017 statement of financial position of Ocean Breezes Limited reported Accounts Receivable of $450,000 and the Allowance for Doubtful Accounts of $45,000. During 2018, the following transactions occurred (do not worry about the date of the transaction):

1. service revenue billed (provided) on account, $1,500,000;

2. collections from customers, $1,300,000;

3. accounts written off $37,000;

4. previously written off accounts of $4,000 were collected (in addition to the regular collections).

Instructions

1. Record the 2018 transactions.

2. Calculate the balance in Accounts Receivable and Allowance for Doubtful Accounts as at December 31, 2018.

3. If the company estimates that uncollectible accounts are expected to be $ 30,690, prepare the adjusting entry for bad debts expense at December 31, 2018.