On June 2, 2011, Fred's TV Sales Sold Mark a Large

On June 2, 2011, Fred's TV Sales sold Mark a large HD TV, on account, for $12,000. Fred's TV Sales uses the accrual method. In 2012, when the balance on the account was $8,000, Mark filed for bankruptcy. Fred was notified that he could not expect to receive any of the amount owed to him. In 2013, final settlement was made and Fred received $1,000. How much bad debt loss can Fred deduct in 2013?

A) $0.
B) $7,000.
C) $8,000.
D) $12,000.
E) None of the above.