Wasson Corp had the following items in its unadjusted trial balance at December 31:

Debit Credit Cash sales $77,000 Credit sales 130,000 Accounts receivable $56,000 Allowance for doubtful accounts 500

Prepare the adjusting entry to estimate bad debts under each of the following independent situations. (1) Bad debts are estimated to be 5% of credit sales. (2) An analysis shows that 6% of outstanding accounts receivable will not be collected.