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

Franklin Company's bank reconciliation as of August 31 is shown below. $$\begin{array} { | l | r | l | r | } \hline \text { Bank balance } & \$ 14,237 & \text { Book balance } & \$ 13,162 \\\hline \text { + Deposit in transit } & 4,500 & \text { Bank service fees } & - 50 \\\hline \text { - Outstanding checks } & - 3 , 9 0 0 & \text { Note collected } & 1.725 \\\hline \text { Adjusted bank balance } & \$ 14,837 & \text { Adjusted book balance } & \$ 14,837 \\\hline\end{array}$$ The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

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