Alex Co. elects to use the percentage of sales basis in 1996 to record bad debts expense and concludes that \(2 \%\) of net credit sales will become uncollectible. Credit sales are \(\$ 700,000\) for 1996 , sales returns and allowances are \(\$ 50,000\), and the allowance for doubtful accounts has a credit balance of \(\$ 12,000\). Prepare the adjusting entry to record bad debts expense in 1996.