Company B estimates bad debt expense to be 2% of credit sales, which were $610,000 for the year. If the allowance account has a debit balance of $900 before adjustment, the journal entry necessary to record bad debt expense is:debit Bad Debt Expense for $11,300; credit Allowance for Doubtful Accounts for $11,300debit Bad Debt Expense for $13,100; credit Allowance for Doubtful Accounts for $13,100debit Allowance for Doubtful Accounts for $13,100; credit Bad Debt Expense for $13,100debit Allowance for Doubtful Accounts for $11,300; credit Bad Debt Expense for $11,300debit Bad Debt Expense for $12,200; credit Allowance for Doubtful Accounts for $12,200debit Allowance for Doubtful Accounts for $12,200; credit Bad Debt Expense for $12,2002-Company B estimates bad debt expense to be 2% of credit sales, which were $610,000 for the year. If the allowance account has a credit balance of $900 before adjustment, the journal entry necessary to record bad debt expense is:debit Allowance for Doubtful Accounts for $12,200; credit Bad Debt Expense for $12,200debit Allowance for Doubtful Accounts for $11,300; credit Bad Debt Expense for $11,300debit Bad Debt Expense for $11,300; credit Allowance for Doubtful Accounts for $11,300debit Bad Debt Expense for $13,100; credit Allowance for Doubtful Accounts for $13,100debit Allowance for Doubtful Accounts for $13,100; credit Bad Debt Expense for $13,100debit Bad Debt Expense for $12,200; credit Allowance for Doubtful Accounts for $12,2003-Your company estimates bad debt expense as a percentage of Accounts Receivable that will be uncollectible, which comes to $18,000 for the current year. The Allowance for Doubtful Accounts has a credit balance of $15,000. If no adjusting entry is recoded at year end, how will the financial statements be affected?net income will be understated; assets will be overstatednet income will be overstated; assets will be understatedthe financial statements will not be affectednet income will be overstated; assets will be overstatednet income will be understated; assets will be understated4-The adjusting entry used to record depreciation on equipment would be:debit Accumulated Depreciation; credit Depreciation Expensedebit Depreciation Expense; credit Accumulated Depreciationdebit Accumulated Depreciation; credit Equipmentdebit Equipment; credit Accumulated Depreciationdebit Depreciation Expense; credit Equipment5-The balance in the Bad Debt Expense account represents the amount of account receivable that was actually written off during the year. True False6-A debit balance in Allowance for Doubtful Accounts means that bad debt expense was underestimated in the prior period. True False