On December 31, 2017, ABC enters into a debt restructuring agreement with GG Bank. The bank agrees to restructure a 6.75% (issued at par) $30,000,000 bond by making the following modifications: 1. reducing the principal obligation from $30,000,000 to $24,000,000. 2. extending the maturity date from December 31, 2017, to January 1, 2027. 3. reducing the interest rate from 6.75% to 6.00%. ABCs market interest rate is currently 15% due to its risk profile, i.e. declining revenue and earnings. Market Rateis 15%. Assume that on January 1, 2027, ABC repays the loan in full by paying $24,000,000 to DP Bank.

		Interest	Discount	Carrying
Date	Cash Paid	Expense	Amortized	Amount
Dec. 31, 2017				$ 13,693,379
Dec. 31, 2018	$ 1,440,000	$ 2,054,007	$ 614,007	14,307,386
Dec. 31, 2019	1,440,000	2,146,108	706,108	15,013,494
Dec. 31, 2020	1,440,000	2,252,024	812,024	15,825,518
Dec. 31, 2021	1,440,000	2,373,828	933,828	16,759,345
Dec. 31, 2022	1,440,000	2,513,902	1,073,902	17,833,247
Dec. 31, 2023	1,440,000	2,674,987	1,234,987	19,068,234
Dec. 31, 2024	1,440,000	2,860,235	1,420,235	20,488,470
Dec. 31, 2025	1,440,000	3,073,270	1,633,270	22,121,740
Dec. 31, 2026	1,440,000	3,318,260	1,878,260	24,000,000
Jan. 01, 2017	$ 12,960,000	$ 23,266,621	$ 10,306,621

a) Prepare the interest payment entry for borrower on December 31, 2018. b) What entry would borrower make on January 1, 2027?