The Allowance for Doubtful Accounts Has a Current Debit Balance

Multiple Choice

The allowance for doubtful accounts has a current debit balance of $2,550. Bad-debt expense is estimated to be 3% of net credit sales. If net credit sales were $250,000, which of the following would be part of the adjusting entry for bad-debt expense?

A) Debit allowance for doubtful accounts for $7,500.
B) Credit allowance for doubtful accounts for $4,950.
C) Debit bad-debt expense for $7,500.
D) Debit bad-debt expense for $10,050.