Question 7 (2 points) Assume the following unadjusted account balances at the end of the accounting period for Emmie Company: Accounts Receivable, $300,000; Allowance for Doubtful Accounts, $4,200 (debit balance) and Net sales, $3,600,000 If Emmie's past experience indicates credit losses of 1% of net sales, the adjusting entry to estimate doubtful accounts is: 36,000 36,000 Bad Debts Expense Accounts Receivable Bad Debts Expense Allowance for Doubtful Accounts 31,800 31,800 40,200 Bad Debts Expense Allowance for Doubtful Accounts 40,200 36,000 Bad Debts Expense Allowance for Doubtful Accounts 36,000