Buddy Mountain Corp. currently has an issued debenture outstanding with ING Bank. The note has a principal of $2.5 million, was issued at face value, an interest payable at 7%. The term of the debenture was 10 years and was issued on December 31, 2010. The current market rate of this debenture is 9%. Buddy Mountain Corp. has been experiencing financial difficulties and has asked ING Bank to restructure the note. Both Buddy Mountain and ING Bank prepare financial statements in accordance with IFRS. It is currently December 3, 2017

ING Bank has agreed to accept a building in exchange for relinquishing this debenture. This building has a carrying amount of $900,000 (original cost $3,000,000) and a fair value of $2 million. Assume that the bank had already recognized a loss on impairment

Required:

Prepare journal entries that Buddy Mountain Corp. and ING Bank would make for the restructuring.