Prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the allowance for doubtful accounts is a $500 credit.
a) debit bad debts expense $840; credit allowance for doubtful accounts $840.
b) debit allowance for doubtful accounts $840; credit bad debts expense $840.
c) debit bad debts expense $1,840; credit allowance for doubtful accounts $1,840.
d) debit allowance for doubtful accounts $1,840; credit bad debts expense $1,840.
e) debit bad debts expense $1,340; credit allowance for doubtful accounts $1,340.