12. Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $36 million, 10% unsecured note. The note was signed January 1, 2011, and was due December 31, 2024. Annual interest was last paid on December 31, 2019. At January 1, 2021, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $32 million but carried on Rothschild Chair Companys books at $29 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $2.3 million each, and (c) reduce the principal to $31 million.

Journal entry worksheet 1 2 3 3 4 5 6 > Record the loss on troubled debt restructuring. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021 Record entry Clear entry View general journal Journal entry worksheet 1 N 3 4 5 6 > Record the interest revenue. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2021 Record entry Clear entry View general journal Journal entry worksheet 1 2 3 4 5 6 > Record the interest revenue. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2022 Record entry Clear entry View general journal Journal entry worksheet 1 2 3 3 5 09 6 > Record the interest revenue. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2023 Record entry Clear entry View general journal Record the interest revenue. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2024 Record entry Clear entry View general journal Journal entry worksheet