10 marks - 15 minutes Paradise Corp., which uses a perpetual inventory system and the allowance method for estimating uncollectible accounts. They sell merchandise on account to two customers: The first customer was Vertigo Inc. where Paradise sold $1,500 worth of merchandise on August 1, terms 2/10, n/30. The goods had cost Paradise $900. On September 1 Paradise found out that they are very unlikely to receive any of this money. They are new to accounting so they decide to use 100% as their allowance rate. On October 1 Paradise wrote off the balance of this account because Vertigo declared bankruptcy. Unexpectedly, on November 5th, Paradise receive a cheque for $350 from Vertigo. No further collections are expected. The second customer was Notorious Limited where Paradise sold $2,500 worth of merchandise on August 2, terms 2/10, n/30. The goods had cost Paradise $1,500. On August 6, Notorious returned merchandise worth $500 to Paradise. This merchandise had a cost of $300 and there was nothing wrong with the merchandise. On August 11, Paradise received payment from Notorious for the balance due. Instructions Prepare ten of the appropriate journal entries for Paradise. There are at least 11 journal entries above. You can receive a bonus mark if you do all of them. Also, briefly comment (one sentence) on their use of 100% for an allowance rate to receive another bonus mark. Is it good to use 100%? This section is marked out of ten, but you can receive up to 12 marks