Franklin Company's Bank Reconciliation as of August 31 Is Shown

Franklin Company's bank reconciliation as of August 31 is shown below.
$\begin{array}{|l|r|l|r|}\hline \text { Bank balance } & \$ 14,237 &\text { Book balance } & \$ 13,162 \\\hline \text {+ Deposit in transit } & 4,500&\text { Bank service fees } &-50 \\\hline \text {- Outstanding checks } & -3,900& \text { returned } &1,725\\\hline \text { Adjusted bank balance } & \$ 14,837&\text { Adjusted book balance } & \$14,837\\\hline\end{array}$

The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

A) Debit Cash $4,500; credit Sales $4,500.
B) Debit Cash $1,725; credit Notes Receivable $1,725.
C) Debit Cash $50; credit Bank Service Fee Expense $50.
D) Debit Misc. Expense $3,900; credit Cash $3,900.
E) Debit Notes Receivable $1,725; credit Cash $1,725.