The statement of financial position as at 31 May 2014 of Pondlake Limited included an allowance for doubtful debts of £4,600. The company's accounts for the year ended 31 May 2015 are now being prepared. The company's policy now is to relate the allowance for doubtful debts to the age of debts outstanding. The debts outstanding at 31 May 2015 and the required allowances for doubtful debts are as follows:

Customers are allowed a cash discount of 2% for settlement of debts within one month. It is now proposed to make a provision for discounts to be allowed in the company's accounts for the year ended 31 May 2015.

Required:
Prepare the following accounts for the year ended 31 May 2015 in the books of Pondlake Limited to record the above transactions:

(a) Allowance for doubtful debts;

(b) Provision for discounts to be allowed on debtors.

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Allowance for Debts outstanding Amount doubtful debts % Up to 1 month 60,000 0.5 More than 1 month and up to 2 months 42,000 1 More than 2 months and up to 3 months More than 3 months 34,000 2 2 20,000 3