The O'Hara Group is owed $1,160,000 by Hilton Enterprises under an 10% note with three years remaining to maturity. The prior year of interest was unpaid. O'Hara agrees to restructure the note under terms that yield a present value of $960,000. The journal entry that O'Hara would make to record this transaction would include a loss on troubled debt restructuring as bad debt expense in the amount of:

Multiple Choice

• $0.

• $116,000.

• $316,000.

• $336,000.