The September 30, 2014, balance sheet of Nelson Products reports the following:
Accounts Receivable ..................................................... $310,000
Allowance for Doubtful Accounts (credit balance) ................. 10,000
During the last quarter of 2014, Nelson Products completed the following selected transactions:
Dec. 30 Wrote off the following accounts receivable as uncollectible: Barry White, $2,500; Carlos Media, $2,200; and Doug Zabellos, $1,100.
31 Recorded bad-debt expense based on the aging of accounts receivable, as follows:

Required
1. Record the transactions in the general journal.
2. Open the Allowance for Doubtful Accounts three-column ledger account, and post entries affecting that account. Keep a running balance.
3. Most companies report two-year comparative financial statements. If Nelson Products' Accounts Receivable balance was $320,000 and the Allowance for Doubtful Accounts stood at $12,000 at December 31, 2013, show how the company will report its accounts receivable in a comparative balance sheet for 2014 and 2013.
4. Suppose, on December 31, the bad-debt expense was based on an estimate of 4 percent of the accounts receivable balance, rather than on the aging of accounts receivable.
Record the December 31, 2014, entry for bad-debt expense in the general journal.

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Age of Accounts Accounts Receivable 1-30 Days 31-60 Days 61-90 Days Over 90 Days Total = $328,500 Estimated percent uncollectible %3D $179,000 $95,000 $37,500 5.0% $17,000 40.0% 0.1% 0.3%