on December $31,2025,$ American Bank enters into a debt restructuring agreement with Vaughn Company, which is now experiencing financial trouble. The bank agrees to restructure a $12\%,$ issued at par, $$4,000,000$ note receivable by the following modifications:

$1.$ Reducing the principal obligation from $$4,000,000$ to $$2,710,000.$

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

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