7. Annual sales of a company are approximately $18 million. At the end of year 1, accounts receivable were presented in the company's balance sheet as follows: Accounts Receivable Less: Allowance for doubtful accounts $120,000 18,000 During year 2, $25,000 of specific accounts receivable were written off as uncollectible. Of these accounts written off, receivables totaling $5,000 were subsequently collected. At the end of year 2, an aging of accounts receivable indicated a need for a $19,000 allowance to cover possible failure to collect the accounts currently outstanding. The company makes adjusting entries for uncollectible accounts only at year-end. In the adjusting entry required at December 31, year 2, to increase the Allowance for Doubtful Accounts to $19,000: * 15 (3 Points) O The allowance for doubtful accounts should be credited by $1,000 The allowance for doubtful accounts should be credited by $19,000 The allowance for doubtful accounts should be credited by $21,000 The allowance for doubtful accounts should be credited by $26,000