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At year$-$end December $31,$ Chan Company estimates its bad debts as $1\%$ of its annual credit sales of $$487,500.$ Chan records its bad debts expense for that estimate. On the following February $1,$ Chan decides that the $$580$ account of $P.$ Park is uncollectible and writes it off as a bad debt. On June $5,$ Park unexpectedly pays the amount previously written off.

xercise $7-10($Static$)$ Percent of sales method; write$-$off LO P$3$

repare Chan's journal entries to record the transactions of December $31,$ February $1,$ and June $5.$

Journal entry worksheet

$2,3,4$

Record the estimated bad debts expense.