Gamer Inc. determines that it cannot collect $60 owed to it by its customer T. Jacobs. Gamer uses the direct write-off method. How would the company record this transaction?

Debit Bad Debt Expense for $60 and credit Accounts Receivable-T. Jacobs for $60.

Debit Allowance for Doubtful Accounts for $60 and credit Accounts Receivable-T. Jacobs for $60.

Debit Bad Debt Expense for $60 and credit Allowance for Doubtful Accounts for $60.

Debit Notes Receivable-T. Jacobs for $60 and credit Accounts Receivable-T. Jacobs for $60.

Debit Accounts Receivable-T. Jacobs for $60 and credit Notes Receivable-T. Jacobs for $60.