During 20X1, Oxley's Department Store had total sales of $1,190,000, of which 70% were on credit. The beginning balance in Accounts Receivable (on January 1, 20X1) was $78,900. The beginning balance in the Allowance for Bad Debts (on January 1, 20X1) was $12,000. The amount of accounts written off as uncollectible during the year was $12,600.

The following aging of Accounts Receivable is for Oxley's at the end of 20X1:

Aging of Accounts Receivable December 31, 20X1

Fewer than 30 days $181,000 31 to 60 days $40,000 61 to 90 days $20,000 Over 90 days $10,000 Total $251,000

Oxley's has developed the following bad debt information from its own past experience:

Age of Accounts / Percent Ultimately Uncollectible

Fewer than 30 days 2% 31 to 60 days 11% 61 to 90 days 38% Over 90 days 91% Oxley's uses the aging method to determine its ending Allowance for Bad Debts balance. Which ONE of the following is included in the journal entry necessary at the end of the year to record Bad Debt Expense?

Group of answer choices

A DEBIT to Allowance for Bad Debts for $24,720.

A DEBIT to Accounts Receivable for $24,720.

A CREDIT to Bad Debt Expense for $25,320.

A CREDIT to Allowance for Bad Debts for $25,320.

A CREDIT to Accounts Receivable for $25,320.

A DEBIT to Bad Debt Expense for $24,720.