At the end of the current year, using the aging of receivable method, 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.
| Bad Debts Expense | 15,375 | |
| Allowance for Doubtful Accounts | 15,375 |
B.
| Bad Debts Expense | 15,750 | |
| Allowance for Doubtful Accounts | 15,750 |
C.
| Accounts Receivable | 15,750 | |
| Bad Debts Expense | 375 | |
| Sales | 16,125 |
D.
| Bad Debts Expense | 16,125 | |
| Allowance for Doubtful Accounts | 16,125 |
E.
| Accounts Receivable | 16,125 | |
| Allowance for Doubtful Accounts | 16,125 |
Answer: D
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