Allowance for Doubtful Accounts has a credit balance of $677 at the end of the year (before adjustment), and an analysis of accounts in the customer ledger indicates the estimated amount of uncollectible accounts should be $16,908. Based on the estimate above, which of the following adjusting entries should be made?

Select the correct answer.

debit Allowance for Doubtful Accounts, $17,585; credit Bad Debt Expense, $17,585

debit Bad Debt Expense, $16,231; credit Allowance for Doubtful Accounts, $16,231

debit Allowance for Doubtful Accounts, $677; credit Bad Debt Expense, $677

debit Bad Debt Expense, $677; credit Allowance for Doubtful Accounts, $677