Elgin Co. elects to use the percentage of sales basis in 2006 to record bad debts expense.

It estimates that 2% of net credit sales will become uncollectible. Sales are $800,000 for 2006.

sales returns and allowances are $37,000. and the allowance for doubtful accounts has a credit balance of $9,000. Prepare the adjusting entry to record bad debts expense in 2006.