The following information concerns Complex, Inc .: Accounts receivable , 12/31/X7 $56,000 Credit sales during X7 $189,000 Allowance for doubtful accounts, 12/31/X7 $1,500 credit Bad debt expense is determined using the percentage of sales method. The company believes that 4% of sales will never be collected. What would be the balance in allowance for doubtful accounts after the adjusting entry