At January 1, 2021, Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $23 million, 10% unsecured note. The note was signed January 1, 2018, and was due December 31, 2024. Annual interest was last paid on December 31, 2019. 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 Rothschild Chair Company, Inc., to record the restructuring and any remaining transactions 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 $19 million but carried on Rothschild Chair Companys books at $15.7 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $1 million each, and (c) reduce the principal to $17.7 million. 3. First Lincoln Bank agreed to defer all payments (including accrued interest) until the maturity date and accept $31,941,100 at that time in settlement of the debt.

No journal entry required Accounts payable Accounts receivable Accumulated depreciation Allowance for uncollectible accounts Bad debt expense Bonds payable Building Cash Common stock Cost of goods sold Depreciation expense Discount on notes payable Equipment Income tax expense Income tax payable Interest expense Interest payable Interest receivable Interest revenue Inventory Land Notes payable Notes receivable Office equipment Premium on notes payable Premium on notes payable Retained earnings Salaries expense Salaries payable Sales revenue Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $19 million but carried on Rothschild Chair Company's books at $15.7 million. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) No Event General Journal Debit Credit Land 19.0 Loss on troubled debt restructuring 6.3 23 X Notes receivable Interest receivable Interest receivable Land Required 1 Required 2 2. Required 1 Required 2 Required 3 First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $19 million but carried on Rothschild Chair Company's books at $15.7 million. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet 2 Record any necessary adjustment to land prior to recording the exchange for debt. Note: Enter debits before credits. Event General Journal Debit Credit Land Loss on troubled debt restructuring 19.0 6.3 Notes receivable Interest receivable Required 1 Required 2 Required 3 First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $19 million but carried on Rothschild Chair Company's books at $15.7 million. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet Record the settlement of debt in exchange for land. Note: Enter debits before credits. Event General Journal Debit Credit Interest receivable Land 2. Required 3 Required 1 Required 2 First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $1 million each, and (c) reduce the principal to $17.7 million. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet 2 3 Record the forgiveness of interest accrued from last year. Note: Enter debits before credits. Events General Journal Debit Credit Required 3 Required 1 Required 2 First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $1 million each, and (c) reduce the principal to $17.7 million. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet 3 Indicate the entry that would be recorded for interest at the end of years December 31, 2021, 2022, 2023 and 2024. Note: Enter debits before credits. Events General Journal Debit Credit 2 Required 2 Required 3 Required 1 First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $1 million each, and (c) reduce the principal to $17.7 million. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet 2 Record the payment at the bonds' maturity. Note: Enter debits before credits. Events General Journal Debit Credit 3 Required 2 Required 3 Required 1 First Lincoln Bank agreed to defer all payments (including accrued interest) until the maturity date and accept $31,941,100 at that time in settlement of the debt. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 3 5 6 2 4 Record any necessary entry on the date of the restructuring agreement. Note: Enter debits before credits. Debit Date General Journal Credit January 01, 2021 Required 1 Required 3 Required 2 First Lincoln Bank agreed to defer all payments (including accrued interest) until the maturity date and accept $31,941,100 at that time in settlement of the debt. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 3 4 5 6 Record interest at year-end. Note: Enter debits before credits. Credit Date General Journal Debit December 31, 2021 Required 1 Required 2 Required 3 First Lincoln Bank agreed to defer all payments (including accrued interest) until the maturity date and accept $31,941,100 at that time in settlement of the debt. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 3 4 5 6 Record interest at year-end. Note: Enter debits before credits. Credit Date General Journal Debit December 31, 2022 Required 1 Required 3 Required 2 First Lincoln Bank agreed to defer all payments (including accrued interest) until the maturity date and accept $31,941,100 at that time in settlement of the debt. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 1 2 3 5 6 Record interest at year-end. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2023 4. Required 1 Required 2 Required 3 First Lincoln Bank agreed to defer all payments (including accrued interest) until the maturity date and accept $31,941,100 at that time in settlement of the debt. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet