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ABC Company uses the allowance method and estimates bad debts using the percent - of...

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Accounting

ABC Company uses the allowance method and estimates bad debts using the percent - of - sales method. The company's management estimates that 3% of net credit sales will be uncollectible for the year 2026. Net credit sales for the year amounted to $230,000. What is the journal entry to record the estimated Bad Debts Expense?
A. Debit Bad Debts Expense for $230,000; Credit Allowance for Bad Debts for $230,000
B. Debit Allowance for Bad Debts for $230,000; Credit Bad Debts Expense for $230,000
C. Debit Bad Debts Expense for $6,900; Credit Allowance for Bad Debts for $6,900
D. Debit Allowance for Bad Debts for $6,900; Credit Bad Debts Expense for $6,900
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