Refer to the note issued by Coldwell AG in BE14.9. During 2019, Coldwell experiences financial difficulties. On

Question:

Refer to the note issued by Coldwell AG in BE14.9. During 2019, Coldwell experiences financial difficulties. On January 1, 2020, Coldwell negotiates a modification of the terms of the note. Under the modification, Flint Hills Bank agrees to reduce the of the note to €90,000 and to extend the date to January 1, 2024. Annual interest payments on December 31 will be made at a rate of 8%. Coldwell's market interest rate at the time of the modification is 12%. Prepare Coldwell's entries for
(a) The modification on January 1, 2020,
(b) The first interest payment date on December 31, 2020.
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...