Charmed, Inc

Charmed, Inc. had credit sales for the period of $144,000. The balance in Allowance for Doubtful Accounts is a debit of $653. If Charmed estimates that 3% of credit sales will be uncollectible, what is the required journal entry to record estimated uncollectible accounts?

A) Debit Bad Debt Expense, $4,320; credit Allowance for Uncollectible Accounts, $4,320.
B) No entry is required.
C) Debit Bad Debt Expense, $4,973; credit Allowance for Uncollectible Accounts, $4,973.
D) Debit Bad Debt Expense, $3,667; credit Allowance for Uncollectible Accounts, $3,667.