Ch8 Case Study Assignment - Part 1 Important: Please watch this video >>>>> "New" Ch8 Bad Debt Expense Journal Entry Video Tip: This Ch8 video provides step-by-step instructions to complete this problem. As of January 1, 2021, the balance sheet of Redwood Company has an Accounts Receivable balance of $500,000 and an unadjusted credit balance in the Allowance for Doubtful Accounts of $100,000 a. Sales on account for $600,000 b. Sales returns and allowances for $75,000. C. Collections from customers for $450,000 d. Customer account balances written off for $85,000. e Previously written off customer account balances for $40,000 were collected f. Prepare the adjusting journal entry to estimate bad debt as of December 31, 2021 1: The company uses the percentage of receivables method to estimate bad debt expense. 2: Redwood Company estimates that uncollectible account balances are expected to be 30% of total accounts receivable as of December 31, 2021. 1-Prepare journal entries in proper format. a. Account Name Debit Credit Sales on account for $600,000. Debit Credit b. Account Name Sales returns and allowances for $75,000. Debit Credit c. Account Name Collections from customers for $450,000. Debit Credit d. Account Name Customer account balances written off for $85,000. Debit Credit e. Account Name Previously written off customer account balances for $40,000 were collected. Debit Credit f. Account Name Prepare the adjusting journal entry to estimate bad debt as of December 31, 2021: 1: The company uses the percentage of receivables method to estimate bad debt expense. 2: Redwood Company estimates that uncollectible account balances are expected to be 30% of total accounts receivable as of December 31, 2021. 2. Instructions for Posting (200 to 300 words - 60pts): a. Explain what the Allowance Method of accounting for Bad Debts involves. b. Provide two reasons for using the Allowance Method to account for Bad Debts. c. Explain how to compute interest for a $5,000 loan at 12% interest for 3 months. Upload and attach your completed excel file to your posting