Ray Lumber Company Collects $500 on an Account That Had

Multiple Choice

Ray Lumber Company collects $500 on an account that had been directly written off earlier the same year in the amount of $1,000. The journal entry to record the reinstatement transaction would include a:

A) $1,000 debit to Accounts Receivable.
B) $500 debit to Accounts Receivable.
C) $500 debit to Bad Debts Recovered.
D) $1,000 debit to Bad Debts Expense.