On December $31,2025,$ American Bank enters into a debt restructuring agreement with Coronado Company, which is now experiencing financial trouble. The bank agrees te restructure a $12\%$ issued at par, $$3,680,000$ note receivable by the following modifications:

$1.$ Reducing the principal obligation from $$3,680,000$ to $$2,944,000$

$2.$ Extending the maturity date from December $31,2025,$ to January $1,2029$

$3.$ Reducing the interest rate from $12\%$ to $10\%$

Coronado pays interest at the end of each year. On January $1,2029,$ Coronado Company pays $$2,944,000$ in cash to American Bank.