P -Entries for bad debt expense. The trial balance before adjustment of Risen Company reports the following balances $300,000 Accounts receivable Allowance for doubtful accounts Sales (all on credit) Sales returns and allowances 5,000 1,700,000 80,000 Instructions (a) Prepare the entry for estimated bad debts assuming that doubtful accounts are estimated to be 6% of gross accounts receivable. (b) Assume that all the information above is the same, except that the Allowance for Doubtful Accounts has a debit balance of $5,000 instead of a credit balance. How will this difference affect the journal entry in part (a)? P#2-Factoring Accounts Receivable. On May 1, Dexter, Inc. factored $1.600 Dexter, Ine. faetored $1,600,000 of accounts receivable with Quick Finance on a without recourse basis. Under the Sis. Under the arrangement, Dexter was to handle disputes concerning service, and Quick mance was to make the collections handle the sales discounts, and absorb the credit losses. Quick Finance a finance charge of 6% of the total accounts receivable factored and retained an amount equal to 2% of the total receivables to cover sales discounts. Instructions (a) Prepare the journal entry required on Dexter's books on May 1 (b) Prepare the journal entry required on Quick Finance's books on May 1. (c) Assume Dexter factors the $1,600,000 of accounts receivable with Quick Finance on a with recourse basis instead. The recourse provision has a fair value of $28,000. Prepare the journal entry required on Dexter's books on May 1. (d) Explain the main advantage and disadvantage of selling receivables (1) without recourse and (2) with recourse