Harris Company uses the allowance method of handling its credit losses. It estimates credit losses at 1.5% of credit sales, which were $2,700,000 during the year. On December 31, the Accounts Receivable balance was $475,000, and the Allowance for Doubtful Accounts had a balance of $30,600 before adjustment.

Indicate the effect (increase / decrease) that recording the bad debt expense for the year will have on the company's assets, liabilities, and equity, respectively.

Assets = Liabilities + Equity

Use the following information to answer the next two questions: Harris Company uses the allowance method of handling its credit losses. It estimates credit losses at 1.5% of credit sales, which were $2,700,000 during the year. On December 31, the Accounts Receivable balance was $475,000, and the Allowance for Doubtful Accounts had a balance of $30,600 before adjustment. Indicate the effect (increase / decrease) that recording the bad debt expense for the year will have on the company's assets, liabilities, and equity, respectively. Assets Liabilities Equity + Select one: a. Increase, No Change, Decrease b. Increase, No Change, Increase c. Decrease, Decrease, No Change d. Decrease, No Change, Decrease O e. Increase, Decrease, Increase