Suppose B borrows $100000$ from land uses it to drill in an oil well. B hits a dry hole and looses the entire $100000$ investment. althogh B is solvent, L discharges $40000$ of debt.

Journal entties to record these events might look like this

To record borrowed cash

Cash $100000$

Debt payable $100000$

To record loss on dry hole

Loss on oil well $100000$

Cash $100000$

Debt payable $40000$

What account?

Question $1.$ Under the whole transaction theory, what acciunt woulr be credited for $40000$ yo record the loss on the dry hole?