Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $298,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 4% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if Allowance for Doubtful Accounts has a credit balance of $1,200 before adjustment?

a.

Bad Debt Expense	9,720
Allowance for Doubtful Accounts		9,720

b.

Bad Debt Expense	10,720
Allowance for Doubtful Accounts		10,720

c.

Bad Debt Expense	11,720
Allowance for Doubtful Accounts		11,720

d.

Bad Debt Expense	10,220
Allowance for Doubtful Accounts		10,220