XY bank gives guarantee in the favour of MM bank for loan taken by MM of ₹20 lakh. As on 2007–08 the financial position of MM is sound and there is not internal or external indicator indicating default by MM. During the year 2008–09, MM suffered heavy loss on account of sub-prime crisis and it has applied to court for bankruptcy the matter is under consideration of court by the end of 2008–09. The management of XY foresees that it is probable that MM will default in paying off about 30% of its liabilities. Show how this is to be recognized in the books of XY bank.