How should a business that is using the CECL method of accounting for bad debts recognize an actual bad debt loss on its financial statements?

Reduce both net accounts receivable and the allowance for doubtful accounts by the amount of the loss, and recognize the actual loss on the income statement as an operating expense .

Reduce both gross accounts receivable and the allowance for doubtful accounts for the amount of the actual loss

Reduce net accounts receivable on the balance sheet and net sales on the income statement by the amount of the actual loss Reduce the allowance for doubtful accounts and increase net accounts receivable by the amount of the actual loss