Our company uses the percentage of receivables method to estimate bad debt expense for the year. We had the following account balances on our unadjusted trial balance at the end of the year (December 31): accounts receivable, debit balance of $150,000; allowance for bad debts, debit balance of $1,000. We estimate that 3.5% of accounts receivable at the end of the year are uncollectible. What will be the balance in allowance for bad debts after the adjusting entry is recorded? O $4,000 0 $4,250 O $5,250 O $6,250 Our company uses the percentage of sales method to estimate bad debt expense for the year. Our allowance for bad debts account has a debit balance of $1,000 prior to the adjusting entry for bad debt expense. We have estimated that 2% of net credit sales will be uncollectible for the current year. Net credit sales for the year totaled $200,000. What will be the balance in allowance for bad debts after the adjusting entry is recorded? O $3,000 O $4,000 O $5,000 $6,000