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Grey Corporation has $100,000 of accounts receivable on December 31, 2015. The unadjusted balance of its Allowance for Doubtful Accounts is a credit of $1,000.

Grey Corporation has $100,000 of accounts receivable on December 31, 2015. The unadjusted balance of its Allowance for Doubtful Accounts is a credit of $1,000. Experience suggests 5 percent of its receivables will be uncollectible. The amount that should be debited to Bad Debt Expense and credited to Allowance for Doubtful Accounts in the year-end adjusting entry is _____.

a.$50

b.$1,000

c.$2,070

d.$5,000

e. $6,000

f. $4,000

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