Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $308,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 7% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if Allowance for Doubtful Accounts has a credit balance of $2,600 before adjustment?

a.Bad Debt Expense$19,960Allowance for Doubtful Accounts$19,960

b.Bad Debt Expense$18,960Allowance for Doubtful Accounts$18,960

c.Bad Debt Expense$18,460Allowance for Doubtful Accounts$18,460

d.Bad Debt Expense$17,960Allowance for Doubtful Accounts$17,960