Reef Tours Ltd commenced operations on 1 July 2022. By the end of the first year of operations, the accountant identified \($3\) 400 of receivables would be uncollectible and wrote these debts off as bad debts using the direct write off method.

On 1st July 2023, in addition to reviewing the business’ credit policies, management decided to adopt the allowance method for accounting for bad debts. On this directive, the accountant established an Allowance for Doubtful Debts amounting to $5515.

During the financial year ended 30 June 2024, receivables totalling \($4360\) were deemed uncollectible and were written off as bad. Furthermore, \($600\) was recovered in respect of bad debts previously written off. The total balance of receivables at 30 June 2024 after accounting for bad debts amounted to \($153\) 430. After discussions regarding the level of bad debts after the first year of trading, management decided to increase the allowance for doubtful debts to 3% of receivables at year end. Ignore GST.

Required:

(a) Prepare general journal entries to record all of the transactions.

(b) Prepare the Bad Debts Expense account and the Allowance for Doubtful Debts account for 2023 and 2024.