Smith Company uses the allowance method to record its expected credit losses. It estimates its losses at one percent of credit sales, which were $750,000 during the year. The Accounts Receivable balance was $220,000 and the Allowance for Doubtful Accounts had a credit balance of $1,000 at year-end. What amount is the debit to the Bad Debts Expense? Select one: $3.200 $6,500 $8,500 $7,500