Company M uses the percentage of sales method of estimating bad debts. At the beginning of the current fiscal year, Company M's allowance for doubtful accounts had a credit balance of $3,000. During the current year, Company M wrote off $4,500 in uncollectible accounts. One $800 account that was written off was paid later. Which of the adjusting entries below is correct if Company X expects that 0.5% of its $1,000,000 of net credit sales for this year will not be collectible?

• Debit: Bad Debt Expense $4,300; Credit: Accounts Receivable $4,300
• Debit: Bad Debt Expense $5,700; Credit: Allowance for Bad Debt $5,700
• Debit: Bad Debt Expense $5,700; Credit: Accounts Receivable $5,700
• Debit: Bad Debt Expense $5,000; Credit: Allowance for Bad Debt $5,000