On December $31,2023,$ Corotel Companys year$-$end, the unadjusted trial balance included the following items:

Account Debit Credit

Accounts receivable $ $2,001,000$

 

 Allowance for doubtful accounts $\mathrm{}39,000$  

 

Sales $($$$3,030,000$ cash sales$)$ $ $11,400,000$

Required:

$1.$ Prepare the adjusting entry needed in Corotels books to recognize bad debts under each of the following independent assumptions.

Bad debts are estimated to be $2\%$ of credit sales.

An analysis suggests that $5\%$ of outstanding accounts receivable on December $31,2023,$ will become uncollectible.On December $31,2023,$ Corotel Companys year$-$end, the unadjusted trial balance included the following items: