Daniel Perkins is the sole shareholder of Whispering Inc., which is currently under protection of the U.S. bankruptcy court. As a debtor in possession, he has negotiated the following revised loan agreement with United Bank. Whispering Inc.s $771,000, 11%, 10-year note was refinanced with a $771,000, 5%, 10-year note. (a) What is the accounting nature of this transaction? Troubled debt restructuring or Extinguishment of debt (b) Prepare the journal entry to record this refinancing: (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(1)		On the books of Whispering Inc.
(2)		On the books of United Bank.

No.	Account Titles and Explanation	Debit	Credit
1.
2.

Account List:

• Accumulated Depreciation-Equipment
• Accumulated Depreciation-Machinery
• Accumulated Depreciation-Plant and Equipment
• Allowance for Doubtful Accounts
• Bad Debt Expense
• Bond Issue Expense
• Bonds Payable
• Buildings
• Cash
• Common Stock
• Cost of Goods Sold
• Debt Investments
• Depreciation Expense
• Discount on Bonds Payable
• Discount on Notes Payable
• Discount on Notes Receivable
• Equipment
• Equity Investments
• Gain on Disposal of Machinery
• Gain on Disposal of Land
• Gain on Disposal of Plant Assets
• Gain on Redemption of Bonds
• Gain on Restructuring of Debt
• Gain on Sale of Machinery
• Interest Expense
• Interest Payable
• Interest Receivable
• Interest Revenue
• Inventory
• Land
• Loss on Disposal of Equipment
• Loss on Disposal of Land
• Loss on Redemption of Bonds
• Machinery
• Mortgage Payable
• No Entry
• Notes Payable
• Notes Receivable
• Paid-in Capital in Excess of Par - Common Stock
• Paid-in Capital in Excess of Par - Preferred Stock
• Premium on Bonds Payable
• Retained Earnings
• Salaries and Wages Expense
• Sales
• Sales Revenue
• Unamortized Bond Issue Costs
• Unearned Revenue
• Unearned Sales Revenue
• Unrealized Holding Gain or Loss - Equity
• Unrealized Holding Gain or Loss - Income