On December 31, 2020, Green Bank enters into a debt restructuring agreement with Skysong Inc., which is now experiencing

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On December 31, 2020, Green Bank enters into a debt
restructuring agreement with Skysong Inc., which is now
experiencing financial trouble. The bank agrees to restructure a
$2.3-million, 12% note receivable issued at par by the
following modifications:
Skysong pays interest at the end of each year. On January 1,
2024, Skysong Inc. pays $1.84 million in cash to
Green Bank for the principal. The market rate is
currently 10%.
Using (1) factor tables, (2) a financial calculator, or (3)
Excel function PV, determine if Skysong can record a gain
under this term modification.

select an option




NoYes

Calculate the gain if any. (For calculation
purposes, use 5 decimal places as displayed in the factor table
provided and Round final answer to 0 decimal places, e.g.
1,525.)
Prepare the journal entries to record the gain (if any)
on Skysong’s books. (Credit account titles
are automatically indented when the amount is entered. Do not
indent manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
What interest rate should Skysong use to calculate its
interest expense in future periods?
Rate of intrest applied in percentages
Prepare the amortization schedule of the note
for Skysong after the debt restructuring.
12/31/20
12/31/21
12/31/22
12/31/23
Total
Prepare the interest payment entry for Skysong on
December 31, 2021, 2022, and 2023. (Credit account
titles are automatically indented when the amount is entered. Do
not indent manually. If no entry is required, select "No Entry" for
the account titles and enter 0 for the
amounts.)
Date
Account Titles and Explanation
Debit
Credit
Dec. 31, 2021 through 2023
What entry should Skysong make on January 1,
2024? (Credit account titles are automatically
indented when the amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and
enter 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
January 1, 2024