Sage, Inc. has an accounts receivable balance at the end of the year of $$5,000.$ It estimates that $2\%$ of its receivables will not be collected. The allowance for doubtful accounts currently has a balance of $$75.$ Sage, Inc. should record an entry that has the following effect:

Group of answer choices

Increase bad debt expense by $$100,$ increase allowance for doubtful accounts $$100$

Decrease accounts receivable $$100,$ increase allowance for doubtful accounts $$100$

Increase bad debt expense $$25,$ increase allowance for doubtful accounts $$25$

Decrease accounts receivable $$25,$ increase allowance for doubtful accounts $$25$