At year-end (December 31), Chan Company estimates its bad debts as 1% of its annual credit sales of $487,500. Chanrecords its bad debts expense for that estimate. On the following February 1, Chan decides that the $580 account of P.Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off.
Prepare Chan’s journal entries to record the transactions of December 31, February 1, and June 5.