Tracie's Trikes Inc. is a manufacturer of bicycles. Tracie's Trikes sold 1,000 bicycles to Bert's Bikes and Sports on account for $150,000. The company uses the allowance method to record bad debts. The company recently found out that Bert's Bike and Sports has gone out of business and it is clear that Tracie's Trikes will not be paid. What entry should the company should record?

a. Dr. Accounts Receivable $150,000

Cr. Bad Debt Expense $150,000

b. Dr. Bad Debt Expense $150,000

Cr. Cash $150,000

c. Dr. Allowance for Doubtful Accounts $150,000

Cr. Accounts Receivable $150,000

d. Dr. Bad Debt Expense $150,000

Cr. Accounts Receivable $150,000