Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
A. Bad Debts Expense................................$15,000
Allowances for Doubtful Accounts................................$15,000
B. Bad Debts Expense................................$12,000
Allowances for Doubtful Accounts................................$12,000
C. Bad Debts Expense................................$12,000
Accounts Receivable.................................................$12,000
D. Bad Debts Expense................................$15,000
Accounts Receivable.................................................$15,000