Exercise 14-23 On December 31, 2017, the Flounder Bank enters into a debt restructuring agreement with Barkley Company, which is now experiencing financial trouble. The bank agree to restructure a 12%, issued at par, $3,700,000 note receivable by the following modifications: 1. Reducing the principal obligation from $3,700,000 to $2,960,000. 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 $2,960,000 in cash to Flounder Bank. Answer the following questions related to Flounder Bank (creditor). What interest rate should Flounder Bank use to calculate the loss on the debt restructuring? (Round answer to o decimal places, e.g. 18%.) Interest rate SHOW LIST OF ACCOUNTS LINK TO TEXT (1) Compute the loss that Flounder Bank will suffer from the debt restructuring. (Round answer to 0 decimal places, e.g. 38,548.) Loss on restructuring of debt (2) Prepare the journal entry to record the loss. (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.) Account Titles and Explanation Credit Debit December 31, 2017 SHOW LIST OF ACCOUNTS