Selected information on ABC Companys accounts receivable is available:

- Accounts receivable had an opening balance on 1 July 2021 of $68,000.

- Allowance for doubtful debts had an opening balance on 1 July 2021 of $4,700.

- During 2021/22, credit sales were $713,600 (including GST) of which $584,700 has already been collected from customers and $3,266 were written off.

- On 30 June 2022, an aging of accounts receivable analysis shows that $5,300 (excluding GST) will probably not be collected.

What is the adjusting entry for the bad debts expense?

a. DR Allowance for doubtful debts $3,440; and CR Accounts receivable $3,440 b. DR Bad debts expense $3,880; and CR Accounts receivable $3,880 c. DR Bad debts expense $3,880; and CR Allowance for doubtful debts $3,880 d. DR Bad debts expense $3,440; and CR Allowance for doubtful debts $3,440