Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $356,000 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 $1,800 before adjustment?

a.

Bad Debt Expense	$22,620
Allowance for Doubtful Accounts		$22,620

b.

Bad Debt Expense	$22,120
Allowance for Doubtful Accounts		$22,120

c.

Bad Debt Expense	$23,120
Allowance for Doubtful Accounts		$23,120

d.

Bad Debt Expense	$24,120
Allowance for Doubtful Accounts		$24,120