Costcos Auto Part uses the aging method to estimate bad debt expense. At the end of 2022, the company had an accounts receivable balance of $76,500 and a pre-adjustment debit balance in the allowance for doubtful accounts of $2,380. The company had the following analysis of accounts receivable at the end of 2022:

Accounts Receivable Age amount proportion expected to default

Current $40,000 2%

1-15 days past due 11,500 3%

16-45 days past due 3,100 7%

46-90 days past due 4,600 15%

Over 90 days past due 17,300 25%

$76,500

Calculate the desired ending balance of the allowance for doubtful accounts at the end of 2022.

Prepare the journal entry to record bad debt expense at year end. (debit credit)

Assume that a receivable of $1,550 is written off on January 15, 2023, give the journal entry to record the write-off by Costcos auto Part.