Valley Spa purchased $10,800 in plumbing components from Tubman Co. Valley Spa Studios signed a 60-day, 14% promissory note for $10,800. If the note is dishonored, what is the journal entry to record the dishonored note? (Use 360 days a year.)

Debit Accounts ReceivableValley Spa $10,800; credit Notes Receivable $10,800.

Debit Accounts ReceivableValley Spa $11,052, credit Interest Revenue $252; credit Notes Receivable $10,800.

Debit Bad Debt Expense $11,052; credit Accounts Receivable $11,052.

Debit Accounts Receivable $11,052; debit Bad Debt Expense $252; credit Notes Receivable $10,800.

Debit Bad Debt Expense $10,800; credit Notes Receivable $10,800.