Valley Spa Purchased $7,800 in Plumbing Components from Tubman Co

Valley Spa purchased $7,800 in plumbing components from Tubman Co. Valley Spa signed a 60-day, 10% promissory note for $7,800. If the note is dishonored at maturity, what is the journal entry to record the dishonored note?

A) Debit Accounts Receivable $7,930; debit Bad Debt Expense $130; credit Notes Receivable $7,800.
B) Debit Bad Debt Expense $7,930; credit Accounts Receivable $7,930.
C) Debit Bad Debt Expense $7,800; credit Notes Receivable $7,800.
D) Debit Accounts Receivable-Valley Spa $7,800; credit Notes Receivable $7,800.
E) Debit Accounts Receivable-Valley Spa $7,930, credit Interest Revenue $130; credit Notes Receivable $7,800.