Legal Entity

This field will represent the Legal Entity associated with the Organization account specified for the Bank Account being reconciled.  This Organization account is specified on the Admin >> Setup >> Bank Account screen.

Organizations are designated to be a Legal Entity on the Organization >> Edit >> Financials tab (Financial Organization Type fields).  

When creating a new Bank Reconciliation, all active Legal Entities will be available for selection.

After initially creating a Bank Reconciliation entry, you can no longer modify the Legal Entity or Bank Account values.