Grayson Co. (GC) uses the percentage of sales method for estimating bad debts for monthly reporting purposes. On January 1, 2020, the allowance for doubtful accounts balance was $5,000 Cr. GC had credit sales of $100,000 for the month of January, and, in the past, 1.5% of credit sales had not been collected. During the month, the company wrote off $3,000 of accounts receivable relating to bankrupt customers. 

Required:

What should be the balance in the allowance for doubtful accounts on January 31?