If Arnbjorg uses the allowance method and a 55 000 kroner debit already exists in the allowance account when the default occurs, what is the journal entry to record the default?

Arnbjorg Marine sells yachting equipment. On 4 September 2011, the company received notice that one of Its customers has gone into bankruptcy owing Arnbjorg 125 000 kroner. Further investigation reveals that this customer has only an insignificant amount of assets, and a reasonable settlement of the debt seems unlikely. Arnbjorg’s management instructs its accounting department to write the amount off.LO1.