Star World Inc. generated $500,000 in credit sales. The company uses the percentage of sales method to estimate uncollectible accounts. The ending accounts receivable balance is $150,000. It was determined that 9% of credit sales will be uncollectible. Allowance for doubtful accounts holds a current balance of $10,000. The entry to record the above expense will include:
Select one:
a. a debit to Allowance for Doubtful Accounts for $45,000
b. a debit to Bad Debt Expense for $10,000
c. a debit to Bad Debt Expense for $45,000
d. a credit to Bad Debt Expense for $45,000
e. a credit to Allowance for Doubtful Accounts for $45,000
