1- Cullumber Corp. currently has an issued debenture outstanding with Abbra Bank. The note has a principal of $4 million, was issued at face value, and interest is payable at 7%. The term of the debenture was 10 years, and was issued on December 31, 2013. The current market rate for this debenture is 9%. Cullumber Corp. has been experiencing financial difficulties and has asked Abbra Bank to restructure the note. Both Cullumber and Abbra Bank prepare financial statements in accordance with IFRS. It is currently December 31, 2020. For each of the following independent situations related to the above scenario, prepare the journal entries that Cullumber Corp. and Abbra Bank would make for the restructuring that is described. A- Abbra Bank has agreed to accept common shares with a market value of $3.5 million in exchange for relinquishing this note. Assume that the bank had previously recognized a loss on impairment. On the books of Cullumber Corporation

Accounting title and explanation	Debit	Credit

On the books of Abbra Bank:

Accounting title and explanation	Debit	Credit

B-Abbra Bank has agreed to accept a building in exchange for relinquishing this debenture. The building has a carrying amount of $600,000 (original cost was $1,900,000) and a fair value of $3.5 million. Assume that the bank had already recognized a loss on impairment. On the books of Cullumber Corporation:

Accounting title and explanation	Debit	Credit

On the books of Abbra Bank:

Accounting title and explanation	Debit	Credit

C- Abbra Bank agrees to modify the note by allowing Cullumber not to pay the interest on the note for the remaining period. Assume that the bank had not previously recognized any loss on impairment. On the books of Cullumber Corporation:

Accounting title and explanation	Debit	Credit

On the books of Abbra Bank:

Accounting title and explanation	Debit	Credit

D- Abbra Bank agrees to reduce the principal to $1.6 million and require interest only in the third year at 4%, waiving the first 2 years worth of interest. (Hint: Refer to Chapter 3 for tips on calculating and use the time value of money tables.) Assume that the bank had not previously recognized any loss on impairment On the books of Cullumber Corporation:

Accounting title and explanation	Debit	Credit

On the books of Abbra Bank:

Accounting title and explanation	Debit	Cedit