Waterway Company reports the following financial information before adjustments.

Debit ($) Credit ($)
Accounts receivable 163,400
Allowance for doubtful accounts 3,660
Sales revenue (all on credit) 815,700
Sales returns and allowances 50,260

Prepare the journal entry to record bad debt expense assuming Waterway Company estimates bad debit at (a) 4% of accounts receivable and (b) 4% of accounts receivable but Allowance for Doubtful Accounts had a $1,420 debit balance.