The following information relates to Thermos Ltd for December $2023$

Sales on credit $$700,000$

Accounts receivable $$180,000$

Bad debts written off $$25,000$

Required

a$)$ Indicate the amount of bad debts expense that Thermos Ltd will report if it uses the direct write$-$off method of accounting for bad debts.

b$)$ Assume that Thermos Ltd decides to estimate its bad debts expense based on $2\%$ of sales on credit. Indicate the amount of bad debts expense will the business record if it has an allowance for doubtful debts credit balance of $$3,000$ at $31$ December $2022.$

c$)$ Assume the same facts as in part b$),$ except that there is a debit balance of $$8,000$ in allowance for doubtful debts. Indicate the amount of bad debts expense that Thermos Ltd will record.

d$)$ Provide the journal entries for a$),$ b$)$ and c$).$