Digital Corporation
the Following Data Concern Digital Corporation for 2012

Digital Corporation
The following data concern Digital Corporation for 2012.
$\begin{array}{ll}\text { Credit sales during the year } & \$ 2,400,000 \\\text { Accounts receivable--December } 31,2012 & 410,000 \\\text { Allowance for bad debts--December } 31,2012 & 55,000 \\\text { Bad debt expense for the vear } & 35,000\end{array}$
-Refer to the information provided for Digital Corporation. What are the effects on the accounting equation when Digital makes the adjustment to record bad debt expense using the allowance method?

A) Assets increase and liabilities decrease
B) Assets and equity decrease
C) Assets increase and equity decreases
D) Assets decrease and equity increases