Exercise 14-23 On December 31, 2017, the Indigo Bank enters into a debt restructuring agreement with Barkley Company, which is now experiencing financial trouble. The bank agrees 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 Indigo Bank. Answer the following questions related to Indigo Bank (creditor). What interest rate should Indigo Bank use to calculate the loss on the debt restructuring? (Round answer to 0 decimal places, e.g. 18%.) Interest rate % (1) Compute the loss that Indigo 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.) Date Account Titles and Explanation Debit Credit December 31, 2017 Prepare the interest receipt schedule for Indigo Bank after the debt restructuring. (Round answers to 0 decimal places, e.g. 38,548.) INDIGO BANK Interest Receipt Schedule After Debt Restructuring Effective-Interest Rate Date Cash Received Interest Revenue Increase in Carrying Amount Carrying Amount of Note 12/31/17 $ $ $ $ 12/31/18 12/31/19 12/31/20 Total $ $ $ Prepare the interest receipt entry for Indigo Bank on December 31, 2019. (Round answers to 0 decimal places, e.g. 38,548. 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.) Date Account Titles and Explanation Debit Credit December 31, 2019 What entry should Indigo Bank make on January 1, 2021? (Round answers to 0 decimal places, e.g. 38,548. 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.) Date Account Titles and Explanation Debit Credit December 31, 2021 Click if you would like to Show Work for this question: Open Show Work