Star World Inc. generated $500,000 in credit sales. The company uses the percentage of sales method to estimate uncollectable accounts. The ending accounts receivable balance is $150,000. It was determined that 9% of credit sales will be uncollectable. Allowance for doubtful accounts holds a current balance of $10,000. the entry to record the above expense will include:

a. a debit to bad debt expense for $45,000
b. a credit to bad debt expense for $45,000
c. a debit to allowance for doubtful accounts for $45,000
d. a debit to bad debt expense for $10,000
e. a credit to allowance for doubtful accounts for $10,000

Answer: a. a debit to bad debt expense for $45,000