How do I write off a loan / note payable?

How can I write off a loan we have received that has been written off? We received some funds years ago when starting the company as a loan, and the person who loaned us the funds has offered to write it off. 

We used Notes payable to track the amount owed as a non-current liability. Would it make sense to create a new account under Other miscellaneous income and a journal entry to record the loan write off as "other income"?