I don't like these kinds of questions but what can i say, accountants have no other choice but to deal with it
Here is the deal, your entry for recording the allowance for doubtfull accounts is correct.
When you find out that "John Doe" has declared bankruptcy and won't be paying, you do that in the sub ledger. This reduces your overall A/R balance and you should also remove his balance from the allowance for doubtful accounts. Your entries should look something like this:
Debit: Allowance for Doubtful accounts
Credit: Accounts Receivable