Phantom Inc

Multiple Choice

Phantom Inc.has an unadjusted debit balance of $5,250 in its Allowance for Doubtful Accounts.The company has experienced bad debt losses of 2% of credit sales in prior periods.Phantom reported net credit sales of $2,250,000 for the current period.To record the potential bad debts,Phantom would debit:

A) Allowance for Doubtful Accounts for $45,000.
B) Allowance for Doubtful Accounts for $50,250.
C) Bad Debt Expense for $50,250.
D) Bad Debt Expense for $45,000.