According to the PMBOK Guide, an issue log is a project document that records and tracks any issues that arise during the project and require resolution. It is part of the project communications management process and helps the project manager to monitor and control the project performance. When a key supplier goes bankrupt and cannot supply the contracted material, this is an issue that affects the project scope, schedule, cost, and quality. Therefore, the project manager should first update the issue log with the details of the issue, such as the description, impact, priority, owner, and status. Then, the project manager should act to minimize the impact of the issue by implementing appropriate actions, such as finding alternative suppliers, negotiating new contracts, adjusting the project plan, or requesting changes. The project manager should also communicate the issue and the actions to the relevant stakeholders, such as the project team, the sponsor, the customer, and the supplier. Updating the issue log and acting to minimize the impact are proactive and responsible steps that the project manager should take first to address the issue and ensure the project success. References: PMBOK Guide, A practical approach to supply-chain risk management