Jake Corp. owes $440,000 to Flagship Bank on a 10 year 8% note, due on December 31, 2024. The note was issued at par. Because Jake Corp. is in financial trouble, Flagship Bank agrees to extend the maturity date to December 31, 2026, reduce the principal to $360,000, and reduce the interest rate to 4%, payable annually on December 31. The market rate is currently 4%. Both Jake Corp. and Flagship Bank prepare financial statements in accordance with IFRS. Required: ROUND CURRENCY TO 2 DECIMAL PLACES. 1) Explain why this should be accounted for as a settlement as opposed to a modification regarding the restructuring of Jake Corp.'s debt. 2) Prepare the appropriate journal entry(ies) on Jake Corp.'s books for December 31, 2024, 2025, and 2026. 3) Prepare the entry for Flagship Bank on December 31, 2024