38.Watson Company calculated that this year's estimated bad debts expense will be $5800. The unadjusted balance of the allowance for doubtful debts account is $4200. What effect will the necessary adjusting entry have on the following accounts? Gross accounts receivable: bad debts expense: allowance for doubtful debts.

Group of answer choices

1.No effect: increase: increase.

2.Increase: increase: no effect.

3.No effect: increase: decrease.

4.Increase: increase: increase