Using the income statement method for accounting for uncollectible accounts, a company estimates that 2.5% of credit sales will eventually become uncollectible. If credit sales during the year are $400,000 and accounts receivable at the end of the year are $80,000, the adjustment for estimated uncollectible accounts will require a:

A) Credit to Accounts Receivable for $2,000.

B) Debit to Bad Debt Expense for $10,000.

C) Debit to Allowance for Uncollectible Accounts for $10,000.

D) Credit to Bad Debt Expense for $8,000.

Answer: Debit to Bad Debt Expense for $10,000.