Could you please go into detail to clarify how to correctly approach this question 1 and 2? And how you get the answer? (bold the answer in the end please) Thanks in advance!

A trial balance before adjustment included the following: Credit Debit $108.000 Accounts receivable Allowance for doubtful accounts Sales Sales returns and allowances $760 539.000 6.100 Prepare journal entries assuming that the estimate of uncollectible is determined by taking (1) 4% of gross accounts receivable (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Bad Debt Expense Allowance for Doubtful Accounts (2) 3% of gross accounts receivable (assuming a $760 debit allowance account balance). (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Account Titles and Explanation Bad Debt Expense Allowance for Doubtful Accounts