The unadjusted trial balance at year-end for a company that uses the percent of receivables method to determine its bad debts expense reports the following selected amounts:
| Accounts receivable |
$435,000 |
Debit |
| Allowance for Doubtful Accounts |
1,250 |
Debit |
| Net Sales |
2,100,000 |
Credit |
All sales are made on credit. Based on past experience, the company estimates 3.5% of ending account receivable to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?