CP 74 Koss Co. Ltd. began operations on January 1, 2017.It had the following transactions during 2017, 2018, and 2019. 2017

Dec. 31 Estimated uncollectible accounts as $5,000 (calculated as 2% of sales) 2018

Apr. 15 Wrote off the balance of N. Lang, $700

Aug. 8 Wrote off $3,000 of miscellaneous customer accounts as uncollectible

Dec. 31 Estimated uncollectible accounts as $4,000 (1% of sales) 2019

Mar. 6 Recovered $200 from N. Lang, whose account was written off in 2018; no further recoveries are expected

Sept. 4 Wrote off as uncollectible $4,000 of miscellaneous customer accounts

Dec. 31 Estimated uncollectible accounts as $4,500 (1% of sales).

1. Prepare journal entries to record the above transactions.

2. Assume that management is considering a switch to the statement of financial position method of calculating the allowance for doubtful accounts. Under this method, the allowance at the end of 2019 is estimated to be $2,000. Comment on the discrepancy between the two methods of estimating allowance for doubtful accounts.