During 2012, Robby's Camera Shop had sales revenue of $170,000, of which $75,000 was on credit. At the start of 2012, Accounts Receivable showed a $16,000 debit balance, and the Allowance for Doubtful Accounts showed a $900 credit balance. Collections of accounts receivable during 2012 amounted to $60,000.
Data during 2012 follows:
a.On December 31, 2012, an Account Receivable of $1,700 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt.
b.On December 31, 2012, on the basis of experience, a decision was made to continue the accounting policy of basing estimated bad debt losses on 1.5 percent of credit sales for the year.
Required:
1.Prepare the required journal entries.