At year-end (December 31), The Company estimates its bad debts as 0.50% of its annual credit sales of $616,000. The Company records its Bad Debts Expense for that estimate. On the following February 1, The Company decides that the $308 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.
Required:
a. Prepare the journal entries for these transactions.1. Record the estimated bad debts expense.2. Record the entry to write off P. Park's account as uncollectible.3. Record the reinstatement of Park's previously written off account.4. Record the cash received on account.