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Wildhorse Co. uses the percentage of receivables method for recording bad debts expense. The accounts...

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Accounting

Wildhorse Co. uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $260000 and credit sales are $2610000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Wildhorse Co. make if the Allowance for Doubtful Accounts has a credit balance of $2600 before adjustment?

A.Bad Debt Expense 7800

Accounts Receivable 7800

B.Bad Debt Expense 7800

Allowance for Doubtful Accounts 7800

C.Bad Debt Expense 26100

Allowance for Doubtful Accounts 26100

D.Bad Debt Expense 26100

Accounts Receivable 26100

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