At the end of the current year, using the aging of accounts receivable method, management estimated that $$20,750$ of the accounts receivable balance would be uncollectible. Prior to any year$-$end adjustments, the Allowance for Doubtful Accounts had a credit balance of $$425.$ What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Multiple Choice

Account Title Debit Credit

Accounts Receivable $21,175$

Allowance for Doubtful Accounts $21,175$

Account Title Debit Credit

Accounts Receivable $20,750$

Bad Debts Expense $425$

Sales $21,175$

Account Title Debit Credit

Bad Debts Expense $21,175$

Allowance for Doubtful Accounts $21,175$

Account Title Debit Credit

Bad Debts Expense $20,750$

Allowance for Doubtful Accounts $20,750$

Account Title Debit Credit

Bad Debts Expense $20,325$

Allowance for Doubtful Accounts $20,325$