Cash flows, debt restructuring, effect on income under bankruptcy and nonbankruptcy law. Peltzer Manufacturing is experiencing financial difficulties. Rather than entering into a lengthy bankruptcy proceeding, the company has reached an agreement with its long-term creditors to restructure various loans. The restructured loans are described below. Loan AThis 12% debt has a principal balance of $4,000,000 and accrued interest of $80,000. Under the restructuring agreement, $500,000 of debt would be forgiven, and the balance of the amounts due would be refinanced at a rate of 10% with monthly installment payments of $50,000 and a term of eight years. Assets with a net realizable value of $2,500,000 would also be pledged as additional security against the restructured loan. Loan BThis debt has a principal balance of $1,000,000 and accrued interest of $25,000. Under the restructuring agreement, the accrued interest would be forgiven, and the principal amount would be exchanged for preferred stock with a par value of $500,000 and a fair value of $900,000. Loan CThis 12% debt has a principal balance of $2,000,000 and accrued interest of $37,500. Under the restructuring agreement, the creditor would receive a parcel of land with a book value of $200,000 and a fair value of $250,000. The remaining unpaid balance would be refinanced over five years at a 9% interest rate. Installment payments would be on a quarterly basis. 1. Covering the first quarter subsequent to restructuring, prepare a schedule that compares the effect on Peltzers net income of accounting for the restructuring as part of a formal bankruptcy filing versus it not being part of such a filing.

THE QUESTION::: I already know the answer I repeat I KNOW THE ANSWER. All i need to understand is how the interest expense is calculated, and how the amounts for Loan B and C restructing are computed.