'E14-22 (L06) (Term Modification without Gain-Debtor's Entries) On December 31, 2017, American Bank enters into a debt restructuring agreement with Barkley Company, which is now experiencing financial trouble. The bank agrees to restruc- ture a 12%, issued at par, $3,000,000 note receivable by the following modifications: 1. Reducing the principal obligation from $3,000,000 to $2,400,000 2. Extending the maturity date from December 31, 2017, to January 1, 2021 3. Reducing the interest rate from 12% to 10%. Barkley pays interest at the end of each year. On January 1, 2021, Barkley Company pays $2,400,000 in cash to American Bank Instructions (a) Will the gain recorded by Barkley be equal to the loss recorded by American Bank under the debt restructuring? (b) Can Barkley Company record a gain under the term modification mentioned above? Explain. riods is 1.4276%, prepare terest payment schedule of the n (d) (e) Prepare the interest payment entry for Barkley Company on December 31, 2019 What entry should Barkley make on January 1, 2021