Barry Is Both a Debtor and a Creditor of Allen

Multiple Choice

Barry is both a debtor and a creditor of Allen Ltd. At the end of the period Barry owes Allen Ltd $1400 while Allen Ltd owes him $800. Allen Ltd should record which journal entry to offset the amounts against each other?

A) DR Accounts receivable $700; CR Accounts payable $700
B) DR Accounts receivable $2200; CR Accounts payable $2200
C) DR Accounts payable $800; CR Accounts receivable $800
D) DR Accounts payable $2200; CR Accounts receivable $2200