Joy Co. uses the allowance method of accounting for bad debts. Their Allowance for Doubtful Accounts has a year-end credit balance, prior to adjustment, of $700. The bad debts are estimated at 3% of $700,000, the net credit sales. Prepare the year end adjusting journal entry for bad debt expense. Od ob e Od DR: Bad Debts Expense 21,000 CR: AFDA 21,000 DR: AFDE 21,000 CR: Bad Debts Expense 21.000 DR: Bad Debts Expense 11,400 CR: AFDA 11,400 DR: Bad Debts Expense 1.800 CR: AFDA 1,800