1) A Company uses the Income Statement approach to estimate its bad debts and record the allowance related to them. On December 31, 2020, the company estimated bad debts to be $11,250. There is a debit balance in the Allowance for Doubtful Accounts of $950 (at December 31, 2020, before adjustment). The adjustment to the Allowance for Doubtful Accounts at December 31, 2020, will include a____________(please explain and show your work)

a) credit for $12,200.

b) credit for $10,300.

c) credit for $11,250

d) no adjustment required.