The following information is from the records of H2O Events for Year 1: Credit sales during the year Accounts receivable (December 31, Year 1) Allowance for doubtful accounts (December 31, Year 1) Bad debt expense for the year $2,400,000 410,000 55,000 70,000 Refer to H2O Events. What are the effects on the accounting equation when the company makes the adjustment to record bad debt expense using the allowance method? O Assets and shareholders' equity decrease. Assets decrease and shareholders' equity increases. Assets increase and shareholders' equity decreases. Assets increase and liabilities decrease