Problem # 2 (Computing Bad Debts and Preparing Journal Entries) The trial balance before adjustment of Taylor Swift Inc. shows the following balances

Dr. Cr.

Accounts Receivable $180,000

Allowance for Doubtful Accounts 3,500

Sales Revenue (all on credit) $1,000,000

Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 5% of gross accounts receivable and (b) 1% of net sales.