Assume the same information as in E14.24 and answer the following questions related to Green Bank (the creditor). Green Bank prepares financial statements in accordance with IFRS 9. There is no evidence of a significant increase in credit risk and 12-month expected credited losses are calculated at zero. For simplicity, assume that Green Bank had not recognized any impairment prior to this (although it likely would have done so under the expected loss model).

Instructions

a. What interest rate should Green Bank use to calculate the loss on the debt restructuring?

b. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the loss that Green Bank will accrue based on the debt restructuring. (Hint: Refer to Chapter 3 for tips on calculating.) Prepare the journal entry to record the loss. Round to the nearest dollar.

c. Prepare the amortization schedule for Green Bank after the debt restructuring. Round to the nearest dollar.

d. Prepare the interest receipt entry for Green Bank on December 31, 2022.

e. What entry should Green Bank make on January 1, 2024?