Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?

Bad Debt Expense17,000

Allowance for Doubtful Accounts17,000

Bad Debt Expense19,500

Allowance for Doubtful Accounts19,500

Bad Debt Expense22,000

Allowance for Doubtful Accounts22,000

Bad Debt Expense65,000

Allowance for Doubtful Accounts65,000