Island Corporation owes Mutual Bank a 10% note payable for $100,000 plus $8,000 accrued interest. On October 1, 20X1. Island and Mutual Bank execute an agreement whereby Island will pay Mutual $128,000 on the due date of the note on October 1, 20X3. Island will record this transaction to recognize:

Multiple Choice

a debt restructuring gain of $20,000.

a debt restructuring loss of $20,000.

a debt restructuring gain of $8,000.

neither a gain nor a loss from debt restructuring.