Your company uses the allowance method to recognize bad debt expenses. This year, your company recorded $2,000,000 of credit sales and had an ending accounts receivable balance of $800,000. Calculate the bad debt expense for the year assuming the company believes that 2% of credit sales will be uncollectible and the ending balance in the allowance for doubtful accounts is a credit balance of $2,500. Also calculate the balance of the allowance for doubtful accounts after the bad debt adjustment is made on December 31.