Patricks Party Palace, (P3), purveyors of fine party supplies and fun adventures, had the following transactions/situations that either happened in 2020 (or were from prior years but not discovered until 2020) that have NOT, unless otherwise indicated, been addressed/recorded. NOTE: P3 has a tax rate of 32% for the current and all future years.

1. P³ has recorded bad debt expense in the past at a rate of 1 % of accounts receivable, based on an aging analysis. After producing the adjusted trial balance for 2020, P³ decided to increase its bad debt estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been $64,000 instead of $47,000. In 2020 bad debt expense will be $23,000 instead of $18,500. Bad debt expense is included in selling expenses for reporting purposes.
2. Included in administrative expenses in 2019 was salary and wages expense for the CFO of $1,650,000 but his did not include his bonus. The correct expense during 2019 for the CFO was $1,850,000.
3. P³ offers a warranty on party tents that it sells. During 2021, P³ sold 1,000 tents at $800 each. P³ estimates that 5% of the tents will be brought back for warranty repairs at an average cost of $75 per repair. During 2021, 10 tents were repaired under warranty claims at a total cost of $845. (you do not need to record the sales transaction)
4. As a promotion of its Adventure Party line, P³ offers $50 rebates to clients who take 5 hot air balloon adventures. During 2021, 800 clients purchased hot air balloon adventures. P³ estimates that 10% of these clients will take advantage of the rebate offer. During 2021, 16 customers received the hot air balloon rebate.Only record the journal entries for 2020 unless the problem states otherwise.