The trial balnace before adjustment of Risen Company reports the following bal

The trial balnace before adjustment of Risen Company reports the following balnaces:

Account receivable: Dr. 150000

Allowance for doubtful accounts: Cr. 2500

Sale (all on credit): Cr. 850000

Sales returns and allowances: Dr. 40000

(a) Prepare the entries for estimated bad debts assuming that doubtful accounts are estimated to be

(1) 6 percent of gross acconts receivable and (2) 1 percent of net sales

(b) Assume that all the information above is the same except that the Allowance for Doubtful accounts

has a debit balance of 2500 dollars instead of a credit balance. How will this difference affect the journal entries in part (a)?