During 2003. Gonzales Electronics. Incorporated, recorded credit sales of S720.000. Based on prior experience, it estimates a 0.5 percent bad debt rate on credit sales.

Required:

Prepare journal entries for each transaction:

a. The appropriate bad debt expense adjustment was recorded for the year 2003.

b. On December 3 1 , 2003. an account receivable for $300 from a prior year was determined to be uncollectible and was written off.