Cheyenne Corp. uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $170000 and credit sales are $1710000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Cheyenne Corp. make if the Allowance for Doubtful Accounts has a credit balance of $1700 before adjustment?

Bad Debt Expense 8500 Allowance for Doubtful Accounts 8500

Bad Debt Expense 8500 Accounts Receivable 8500

Bad Debt Expense 6800 Accounts Receivable 6800

Bad Debt Expense 6800 Allowance for Doubtful Accounts 6800