A corporation has outstanding accounts receivable totalling $3,500 as of December 31.
During the year the company had sales on credit of $24,000.
There is also a debit balance of $1,200 in the allowance for doubtful accounts.
Management estimates that 8% of its outstanding receivables will be uncollectible.
Record the balances (labeled “Bal”) and the journal entries, in T-account format, to recognize the above information.