20. The ledger for MV Ltd at the end of the current year shows accounts receivable $30 000, sales $300,000, and allowance for doubtful debts with a credit balance of $2000. After ageing the accounts receivable, bad debts are estimated to be 1% of sales. The entries to adjust the allowance for doubtful debts are as follows:

Select one:

a. Debit accounts receivable $3000, Credit Bad debt expense $3000

b. Debit Bad debt expense $1000, Credit allowance for doubtful debt $1000

c. Debit Bad debt expense $3000, Credit allowance for doubtful debt $3000

d. Debit allowance for doubtful debt $1000, Credit Bad debt expense $1000