Geo Company uses the accrual method of accounting. Here is a reconciliation of Geo's allowance for bad debts for the current year.

Beginning allowance for bad debts	$ 950,000
Actual write-offs of accounts receivable during the year	(899,600)
Addition to allowance	845,000
Ending allowance for bad debts	$ 895,400

Which of the following statements is true?

Multiple Choice

• Bad debt expense per books and the deduction for bad debts is $899,600.

• Bad debt expense per books is $845,000, and the deduction for bad debts is $899,600.

• Bad debt expense per books is $899,600, and the deduction for bad debts is $845,000.