Marigold Corp. owes $252,000 to First Trust. The debt is a 10-year, 12% note due December 31, 2022. Because Marigold Cor

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Marigold Corp. owes $252,000 to First Trust. The debt is a
10-year, 12% note due December 31, 2022. Because Marigold Corp. is
in financial trouble, First Trust agrees to extend the maturity
date to December 31, 2024, reduce the principal to $242,000, and
reduce the interest rate to 5%, payable annually on December 31.
Marigold’s market rate of interest is 8%. Prepare the journal
entries on Marigold’s books on December 31, 2022, 2023, and 2024.
Remove the old note at face value and record the new note in the
same journal entry.