The Salamander Company has evaluated its receivables, and has identified the following possible credit losses:

Note #1 has recently deteriorated in credit quality. For Note #1, Salamander estimates the present value of credit losses occurring in the next twelve months is $50,000, and the present value of credit losses occurring after twelve months is $20,000. Note #2 has not deteriorated in credit quality.

For Note #2, Salamander estimates the present value of credit losses occurring in the next twelve months is $5,000, and the present value of credit losses occurring after twelve months is $10,000.

If Salamander is using the CECL model, it would recognize a bad debt expense of:

Multiple Choice

A: $50,000

B: $55,000

C: $75,000

D. $85,000