ABC Company has the following balances at the end of $2020$:

Accounts Receivable $$85,000($Dr$.)$

Sales Revenue $$130,000($Cr$.)$

Allowance for Doubtful Accounts $$4,000($Dr$.)$

ABC estimates bad debts to be $10\%$ of receivables. Prepare the entry necessary to adjust Allowance for Doubtful Accounts.

Select one:

a$.$

Bad Debt Expense $13000$

Allowance for Doubtful Accounts $13000$

b$.$

Bad Debt Expense $4500$

Allowance for Doubtful Accounts $4500$

c$.$

Bad Debt Expense $12500$

Allowance for Doubtful Accounts $12500$

d$.$

Bad Debt Expense $8500$

Allowance for Doubtful Accounts $8500$