Valley Spa purchased $10,200 in plumbing components from Tubman Co. Valley Spa signed a 60-day, 10% promissory note for $10,200. If the note is dishonored, but Tubman intends to continue collection efforts, what is the journal entry to record the dishonored note? (Use 360 days a year.)

• Debit Bad Debt Expense $10,370; credit Accounts Receivable $10,370.

• Debit Accounts ReceivableValley Spa $10,200; credit Notes Receivable $10,200.

• Debit Bad Debt Expense $10,200; credit Notes Receivable $10,200.

• Debit Accounts Receivable $10,370; debit Bad Debt Expense $170; credit Notes Receivable $10,200.

• Debit Accounts ReceivableValley Spa $10,370, credit Interest Revenue $170; credit Notes Receivable $10,200.