On December 31, 2017, American Bank enters into a debt restructuring agreement with Crane Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $2,300,000 note receivable by the following modifications: 1. Reducing the principal obligation from $2,300,000 to $1,840,000. 2. Extending the maturity date from December 31, 2017, to January 1, 2021. 3. Reducing the interest rate from 12% to 10%. Crane pays interest at the end of each year. On January 1, 2021, Crane Company pays $1,840,000 in cash to American Bank. Part 1 Correct answer icon Your answer is correct. Will the gain recorded by Crane be equal to the loss recorded by American Bank under the debt restructuring? eTextbook and Media List of Accounts Attempts: 1 of 15 used Part 2 Correct answer icon Your answer is correct. Can Crane Company record a gain under the term modification mentioned above? eTextbook and Media List of Accounts Attempts: 2 of 15 used Part 3 Assuming that the interest rate Crane should use to compute interest expense in future periods is 1.4276%, prepare the interest payment schedule of the note for Crane Company after the debt restructuring. (Round answers to 0 decimal places, e.g. 38,548.) CRANE COMPANY Interest Payment Schedule After Debt Restructuring Effective-Interest Rate Date Cash Paid Interest Expense Reduction of Carrying Amount Carrying Amount of Note 12/31/17 $ $ $ $ 12/31/18 12/31/19 12/31/20 Total $ $ $ eTextbook and Media List of Accounts Attempts: 0 of 15 used Save for LaterSubmit Answer Part 4 Prepare the interest payment entry for Crane Company on December 31, 2019. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31, 2019 eTextbook and Media List of Accounts Attempts: 0 of 15 used Save for LaterSubmit Answer Part 5 What entry should Crane make on January 1, 2021? (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31, 2021 eTextbook and Media List of Accounts