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. (Show all work.) (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.