Assume thatTealCompany has recently fallen into financial difficulties. By reviewing all available evidence on December 31, 2020, one ofTeal's creditors, the National American Bank, determined thatTealwould pay back only65% of the principal at maturity. As a result, the bank decided that the loan was impaired. The loss is estimated to be $238,700.

What entry should National American Bank make to record this loss?

Dec 31, 2020