Austin Incorporated has credit sales of $1,200,000 during 2012 and estimates at the end of 2012 that 1% of these credit sales will default (Austin uses the percentage-of-sales approach)

Austin Incorporated has credit sales of $1,200,000 during 2012 and estimates at the end of 2012 that 1% of these credit sales will default (Austin uses the percentage-of-sales approach). During 2012 a customer defaulted on a $6,000 balance related to goods purchased during 2011. Austin's accounts receivable and allowance for bad debts balances at the end of the year were $50,000 debit and $7,000 credit, respectively.

Prepare journal entries to record:

A)Write off the defaulted $6,000 balance.

B)Adjusting entry to record the bad debt expense for 2012.

C) What is the net accounts receivable balance at the end of the year after the adjustments have been made?