Linhart Co. uses the percentage-of-accounts receivable basis to record bad debts expense. It estimates that 1% of accounts receivable will become uncollectible. Accounts receivable are $473,800 at the end of the year, and the allowance for doubtful accounts has a credit balance of $1,683.

1) Prepare the adjusting journal entry to record bad debts expense for the year.

2) If the allowance for doubtful accounts had a debit balance of $892 instead of a credit balance of $1,683, determine the amount to be reported for bad debts expense.