On December 31, Prior to Adjustments, the Balance of Accounts

Multiple Choice

On December 31, prior to adjustments, the balance of Accounts Receivable is $22,000 and Allowance for Doubtful Accounts has a credit balance of $135. The firm estimates its losses from uncollectible accounts to be 4% of accounts receivable at the end of the year. The adjusting entry needed to record the estimated losses from uncollectible accounts is

A) $135.
B) $1,015.
C) $745.
D) $880.