2. Bad Debts: (5 points) Cakes Two Go sells wedding cakes on account, and the company uses the allowance method for estimating bad debt. Prepare JEs for the following transactions: A. Assume management estimates that 5% of Accounts Receivable will prove uncollectible, what is the necessary adjusting entry if Allowance for Doubtful Accounts has a credit balance of $900 and Accounts Receivable has a balance of $28,000. Show calculation below: Account Debit Credit B. Rex Johnson's attorney from Dewey, Cheatem, and Howe law firm sent a letter indicating Mr. Johnson is filing bankruptcy and his account balance totaling $800 will not be paid. Record the journal entry to write off Rex's account under the allowance method: Account Debit Credit C. Assume Rex Johnson's account balance was collected. Prepare the necessary JEs for recovery of his account previously written off. Account Debit Credit