3. (10 Marks) On January 1, 2022, Max Corporation is having financial difficulty and therefore has asked KU Bank to restructure its $3 million note outstanding. The present note has 2 years remaining and pays a current rate of interest of 8%. The note was issued at its face value. Required Prepare the journal entry on the restructuring date for each of situations. a. KU Bank agrees to take an equity interest in Max Corporation by accepting 50,000 preference shares and 20,000 ordinary shares in exchange for relinquishing its claim on this note. Preference Share Ordinary Shares Par Value Fair Market Value $10 $5 $40 $25 b. KU Bank agrees to modify the terms of the note as follows: Reducing the principal obligation from $3,000,000 to $2,700,000. Extending the maturity date from January 1, 2024, to January 1, 2025. Reducing the interest rate from 8% to 6%. Max's market rate of interest is 10%