Daniel Cullumber is the sole shareholder of Cullumber Inc., which is currently under bankruptcy court protection. As a debtor in

possession, he has negotiated a revised loan agreement with United Bank. Cullumber Inc.$\text{'}$s $$468,000,10-$year, $10\%$ note issued at par

was refinanced with a $$468,000,10-$year, $7\%$ note. Assume the market rate of interest is $10\%$ at the refinancing date. Both Cullumber

and United Bank prepare financial statements in accordance with IFRS $9.$

Click here to view the factor table PRESENT VALUE OF $1.$

Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF $1.$

$($b$)$ Prepare the journal entries to record this refinancing $(1)$ on the books of Cullumber and $(2)$ on the books of United Bank. Assume

for simplicity that United Bank had not previously recognized any impairment, although under the expected loss method it is likely that

it would have recognized some loss. $($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final

answer to $0$ decimal places e$.$g$.58,971.$ Credit account titles are automatically indented when the amount is entered. Do

not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. List all

debit entries before credit entries.$)$

No$.$ Account Titles and Explanation

Debit

$(1)$

Notes Payable

$(2)$