At January 1, 2021, Borrower, Inc., was indebted to Lender Bank under a $600,000, 9% unsecured note. The note was signed January1, 2016, and was due December 31, 2023. Annual interest was last paid on December 31, 2019. Borrower was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement.

a.Suppose instead that negotiation led to the following agreement with Lender Bank.

Forgive the interest accrued for the year just ended,

Reduce the remaining three years' interest payments to $50,000 each and delay all payments until December 31, 2023, and

Reduce the principal amount to $550,000.

Required: Prepare the relevant journal entries for Borrower, Inc., necessitated by the restructuring of the debt beginning with January 1, 2021 and ending with the final payment on December 31, 2023.