On December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method. On February 15, Year 2, one of Loudoun's customers failed to pay his $1,050 account and the account was written off. On April 4, Year 2, this customer paid Loudoun the $1,050. Which of the following correctly states the effect of the adjusting entry, dated December 31, Year 1, on the elements of the financial statements of the Loudoun Corporation? Asset A. (3,375) Balance Sheet Income Statement Stockholders' Liabilities + 3,375 Equity Revenue Expenses Net Income Statement of Cash Flows NA NA B. (3,375) NA (3,375) NA c. 3,375 NA 3,375 NA NA 3,375 (3,375) NA (3,375) 3,375 NA NA D. NA NA NA NA NA 3,375 OA NA Multiple Choice Option A Option B Option C