On 30 October 2022 Cotton On Ltd decided to write off as abad debt a receivable of $8800 (including GST) from Jo Mercer Pty Ltd (in liquidation). If Cotton On Ltd uses thedirect write-off method, what is the correct entry to write offthe debt?

Select one:

DR Bad debt expense $8000, DR GST payable $800; CR Accounts receivable $8800

DR Allowance for doubtful debts $8000, DR GST payable $800; CR Accounts receivable $8800

DR Allowance for doubtful debts $8800; CR Bad debtsexpense $8800

DR Bad debts expense $8800; CR Allowance fordoubtful debts $8800