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 $39,375 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a credit balance of $3,285. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

A) $\begin{array} { | l | r | r | } \hline \text { Bad Debt Expense } & 36,090 & \\\hline \text { Allowance for Doubtful Accounts } & & 36,090 \\\hline\end{array}$
B) $\begin{array}{|c|c|c|}\hline \text { Bad Debt Expense } & 42,660 & \\\hline \text { Allowance for Doubtful Accounts } & & 42,660 \\\hline\end{array}$
C) $\begin{array}{|c|r|r|}\hline \text { Bad Debt Expense } & 39,375 & \\\hline \text { Allowance for Doubtful Accounts } & & 39,375 \\\hline\end{array}$
D) $\begin{array} { | l | r | r | } \hline \text { Accounts Receivable } & 39,375 & \\\hline \text { Bad Debt Expense } & 3,285 & \\\hline \text { Sales } & & 42,660 \\\hline\end{array}$
E)