What is included in the entry to adjust the Allowance for Doubtful Accounts (allowance for credit losses) on December 31, 2020 to its desired ending balance?

The aging schedule at December 31, 2020, for Derry Inc. shows the following breakdown of total accounts receivable.

Status	Amount
Not past due	$555,000
Past due 1-30 days	$110,000
Past due 31-60 days	$50,000
Past due over 60 days	$15,000
Total	$730,000

The company considers the risk of credit losses to be similar within the aging pools and estimates the following credit loss rates by pool: not past due, 0.5%; past due 1-30 days, 1%; past due 31-60 days, 2%; and past due over 60 days, 8%. The Allowance for Doubtful Accounts (allowance for credit losses) has an $3000 debit balance before adjustment.

What is included in the entry to adjust the Allowance for Doubtful Accounts (allowance for credit losses) on December 31, 2020 to its desired ending balance?

A debit to Bad Debt Expense for $4,775

A debit to Bad Debt Expense for $6,075

A debit to Bad Debt Expense for $3,075

A debit to Bad Debt Expense for $9,075

None of these