Credit sales of Company A during the year ended December 31, 20X0 were $304,930. The company estimated that 3% of its credit sales will end up uncollected. The allowance for doubtful debts of the company had a credit balance of $1,418 on December 31, 20X0.

Calculate the bad debts expense to be recognized at the end of the period and the new balance of the allowance for doubtful debts account. Also prepare the adjusting entry to recognized bad debts expense.