1. Hard Rock Construction owes Frost Bank $60 million under a 7% note with two years remaining to maturity. Due to financial difficulties of Hard Rock, the previous year's interest ($4.2 million) was not received. The bank agrees to settle the note receivable and accrued interest receivable in exchange for land having a fair value of $44 million.

Required:

Compute the loss on troubled debt restructuring that the bank would record. Show all your work and any necessary journal entries.