Moon Company uses the percentage of sales method for recording bad debt expense. For the year, cash sales are $1,000,000 and credit sales are $2,500,000. Management estimates that 1 1/2% (1.5%) is the sales percentage to use. What adjusting entry will Moon Company make to record the bad debt expense?

a. Bad Debt Expense .......................................................... 15,000

Allowance for Doubtful Accounts .......................... 15,000

c. Bad Debt Expense .......................................................... 45,000

Accounts Receivable ............................................. 45,000

d. Bad Debt Expense .......................................................... 52,500

Accounts Receivable ............................................. 52,500