Sebastian Ltd. records uncollectible receivables using the allowance method, calculating the amount of the adjustment using the percentage of receivables approach. At the end of the financial year the balance of the Accounts Receivable account of Sebastian Ltd. is $78,000 debit, the balance of the Allowance for Bad Debts account is $1,000 credit and estimates that 2% of its receivables balance will be uncollectible. Record the adjusting entry. (Alternative: record the adjusting entry assuming the balance of the Allowance for Bad Debts account is $1,000 debit) (Alternative: record the adjusting entry using the percentage of sales approach, assuming net credit Sales Revenue was $78,000 and 2% of credit sales revenue will not be collected)

P11.2a (lo 2, 4) fechter corporation had the following stockholders’ equity accounts on january 1, 2020: common stock ($5 par) $500,000, paid-in capital in excess of par—common stock $200,000, and retained earnings $100,000. in 2020, the company had the following treasury stock transactions. journalize and post treasury stock transactions, and prepare stockholders’ equity section. mar. 1 purchased 5,000 shares at $8 per share. june 1 sold 1,000 shares at $12 per share. sept. 1 sold 2,000 shares at $10 per share. dec. 1 sold 1,000 shares at $7 per share. fechter corporation uses the cost method of accounting for treasury stock. in 2020, the company reported net income of $30,000. instructions a. journalize the treasury stock transactions, and prepare the closing entry at december 31, 2020, for net income. b. open accounts for (1) paid-in capital from treasury stock, (2) treasury stock, and (3) retained earnings. (post to t-accounts.) c. prepare the stockholders’ equity section for fechter corporation at december 31, 2020.