Flounder Corp owes Culver Corp a 10year, 10 note in the amount of $347,600 plus $34,760 of accrued interest.

The note is due today, December 31, 2020 Because Flounder Corp is in financial trouble, Culver Corp agrees to forgive the accrued interest, $31,600 of the principal, and to extend the maturity date to December 31, 2023 Interest at 10 of revised principal will continue to be due on 12/31 each year.

Assume the following present value factors for 3 periods.

21/4% 23/8% 21/2% 25/8% 23/4% 3%

Single sum .93543 .93201 .92859 .92521 .92184 .91514

Ordinary annuity of 1 2.86989 2.86295 2.85602 2.84913 2.84226 2.8286.

a. Compute the new effective-interest rate for Flounder Corp following restructure.

b. Prepare a schedule of debt reduction and interest expense for the years 2020 through 2023.

c. Compute the gain or loss for Culver Corp and prepare a schedule of receivable reduction and interest revenue for the years 2020 through 2023.

d. Prepare all the necessary journal entries on the books of Flounder Corp for the years 2020, 2021, and 2022.

e. Prepare all the necessary journal entries on the books of Culver Corp for the years 2020, 2021, and 2022.