Question 8 0.6 points Save Ansy Nichols Company uses the percentage of credit sales method for recording bad debts expense. The credit sales are $1,000,000. Management estimates that 4% of credit sales will be uncollectible. What adjusting entry will Nichols Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment? Bad Debt Expense 10,000 Allowance for Doubtful Accounts 10,000 Bad Debt Expense 40,000 Allowance for Doubtful Accounts 40,000 Bad Debt Expense 40,000 Accounts Receivable 40.000 Bad Debt Expense 10,000 Accounts Receivable 10,000