On October 2, 2020. Whispering Company sold $6,340 of its elite camping gear (with a cost of $3,450 ) to Lynch Outfitters. As part of the sales agreement, Whispering includes a provision that if Lynch is dissatisfied with the product, Whispering will grant an allowance on the sales price or agree to take the product back (although returns are rare, given the long-term relationship between Whispering and Lynch). Whispering expects total allowances to Lynch to be $800. On October 16,2020 , Whispering grants an allowance of $390 to Lynch because the color for some of the items delivered was a bit different than what appeared in the catalog. (a) Your answer is correct. Prepare journal entries for Whispering to record (1) the sale on October 2, 2020, (2) the granting of the allowance on October 16 , 2020 , and, (3) any adjusting required on October 31,2020 (when Whispering prepares financial statements). Whispering now estimates additional allowances of $260 will be granted to Lynch in the future. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter Of for the amounts.) Indicate the income statement and balance sheet reporting by Whispering at October 31,2020 , of the information re Lynch transaction