At January 1, 2021, Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $22 million, 15% 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 $18 million but carried on Rothschild Chair Company's books at $14.8 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 $16.8 million. 3. First Lincoln Bank agreed to defer all payments (including accrued interest) until the maturity date and accept $30,752,500 at that time in settlement of the debt. 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 $18 million but carried on Rothschild Chair Company's books at $14.8 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 At January 1, 2021, Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $22 million, 15% 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 $18 million but carried on Rothschild Chair Company's books at $14.8 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 $16.8 million. 3. First Lincoln Bank agreed to defer all payments (including accrued interest) until the maturity date and accept $30,752,500 at that time in settlement of the debt. 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 $18 million but carried on Rothschild Chair Company's books at $14.8 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
