Mazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $125,500, and it estimates that 5% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has:
(a) a $2,134 credit balance before the adjustment.
(b) a $628 debit balance before the adjustment.