The trial balance before adjustment of Risen Company reports the following balances:

Accounts receivable Dr $300,000. Allowance for doubtful accounts Cr $5,000. Sales (all on credit) Cr 1,700,000. Sales returns and allowances Dr. 80,000.

(c) On the 3rd day in January, the company received notice that Blue Co. has declared bankruptcy and will not be paying their amount due ($2,000). Prepare the journal entry for the event.