8.A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:

Accounts receivable$375,000debitAllowance for uncollectible accounts500debitNet Sales800,000credit

All sales are made on credit. Based on past experience, the company estimates 0.6% of net credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Select one:

a. Debit Bad Debts Expense $2,130; credit Allowance for Doubtful Accounts $2,130.

b. Debit Bad Debts Expense $2,630; credit Allowance for Doubtful Accounts $2,630.

c. Debit Bad Debts Expense $4,300; credit Allowance for Doubtful Accounts $4,300.

d. Debit Bad Debts Expense $4,800; credit Allowance for Doubtful Accounts $4,800.

e. Debit Bad Debts Expense $5,300; credit Allowance for Doubtful Accounts $5,300.