Switch to the Forms view (Ctrl+2) and double click on Schedule 1 in the forms list to open the form. Then click on line 21, which will open another screen where you again click on line 21 which opens the "Other Income Statement". Scroll down to line number 15 - Income from the Cancellation of Debt. You can delete the amount from there.
Since there was an amount there, however, you'll want to check to see if you have a source document listing the $1295 amount on it in the event it was just entered in an incorrect field.
