Pearl Incorporated factored $120,400 of accounts receivable with Engram Factors Inc. on a with recourse basis. Engram assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable for possible adjustments. Prepare the journal entry for Pearl to record the sale, assuming that the recourse liability has a fair value of $7,420. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit The trial balance before adjustment of Pearl Inc. shows the following balances. Dr. Cr. Accounts Receivable Allowance for Doubtful Accounts Sales Revenue (all on credit) $102,600 1,995 $775,200 Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 4% of gross accounts receivable and (b) 5% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,905 credit balance. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (a) (b)