The Boston Metropolitan Bank which started operations a year back wants to estimate its loan loss provision for the year 2009. The loan loss provision is intended to capture the expected losses that the bank is expected to incur due to loan defaults. On Dec. 31st, 2008 the debit balance in the Provision account was $500,000. Given the rapidly changing U.S. economy, the bank knew that using a simple percentage of loan assets based on past experience to estimate its loan loss provision may not be appropriate. Therefore it wants to simulate its expected losses due to loan defaults to arrive at a more realistic measure of the loan loss provision. The Bank knows that while agricultural loan losses often tend to be normally distributed, retail loan defaults follow a triangular distribution. The bank has the following data available at its disposal.

Max Loss Min Loss Most Likey Loss Mean Std. Dev

Agricultural Loans $1m $60,000 $500,000 200,000

Retail Loans $700,000 $75,000 $300,000

What journal entry should be entered on Jan 1st 2009 to record the loan
loss provision?