At December 31 of the current year, a company reported the following:

• Total credit sales for the current year: $1,200,000
• Accounts receivable balance at December 31 of the current year: $360,000.
• Balance of Allowance for Doubtful Accounts credit balance at December 31: $10,400.

Prepare the necessary adjusting entry to record bad debt expense assuming this companys bad debts are estimated to equal 2.5% of credit sales.