On February 1, a customer's account balance of $4000 was deemed to be uncollectible. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method?
A. Debit Allowance for Doubtful Accounts $4000; credit Bad Debts Expense $4000.
B. Debit Bad Debts Expense $4000; credit Allowance for Doubtful Accounts $4000.
C. Debit Bad Debts Expense $4000; credit Accounts Receivable $4000.
D. Debit Accounts Receivable $4000; credit Allowance for Doubtful Accounts $4000.
E. Debit Allowance for Doubtful Accounts $4000; credit Accounts Receivable $4000.
Answer: E
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