A Company Ages Its Accounts Receivables to Determine Its End

Multiple Choice

A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $375. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

A) $$\begin{array} { | l | l | l | } \hline \text { Accounts Receivable } & 16,125 & \\\hline \text { Allowance for Doubtful Accounts } & & 16,125 \\\hline\end{array}$$
B) $$\begin{array} { | l | r | r | } \hline \text { Accounts Receivable } & 15,750 & \\\hline \text { Bad Debts Expense } & 375 & \\\hline \text { Sales } & & 16,125 \\\hline\end{array}$$
C) $$\begin{array} { | l | l | l | } \hline \text { Bad Debts Expense } & 16,125 & \\\hline \text { Allowance for Doubtful Accounts } & & 16,125 \\\hline\end{array}$$
D) $$\begin{array} { | l | l | l | } \hline \text { Bad Debts Expense } & 15,375 & \\\hline \text { Allowance for Doubtful Accounts } & & 15,375 \\\hline\end{array}$$
E) $$\begin{array} { | l | l | l | } \hline \text { Bad Debts Expense } & 15,750 & \\\hline \text { Allowance for Doubtful Accounts } & & 15,750 \\\hline\end{array}$$