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At the end of 2015, Murray State Lenders had a balance in its accounts receivables of $100,0000 and Allowance for Uncollectible Accounts of $4,500 (credit)

At the end of 2015, Murray State Lenders had a balance in its accounts receivables of $100,0000 and Allowance for Uncollectible Accounts of $4,500 (credit) before any adjustment. The company estimated that 12% of accounts receivables is uncollectible. Murray State's adjustment on December 31, 2015, to record its estimated uncollectible accounts included a:

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Credit to Allowance for Uncollectible Accounts of $12,000.

Debit to Bad Debt Expense of $7,500.

Credit to Allowance for Uncollectible Accounts of $7,500.

Debit to Bad Debt Expense of $7,500; credit to Allowance for Uncollectible Accounts of $7,500.

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