Stacey Corp

Multiple Choice

Stacey Corp. uses the direct write-off method to account for bad debts. On May 26 the company determines that a customer account with a balance of $750 is uncollectible. The journal entry to record this loss is:

A) Debit Bad Debts Expense $750 and credit Accounts Receivable $750.
B) Debit Accounts Receivable $750 and credit Accounts Payable $750.
C) Debit Bad Debts Expense $750 and credit Accounts Payable $750.
D) Debit Allowance for Doubtful Accounts $750 and credit Accounts Receivable $750.
E) Debit Bad Debt Expense $750 and credit Allowance for Doubtful Accounts $750.