On December 31 , 2018 Nicholas Co. is in financial difficulty and cannot pay a note due that day . It is a $3,300,000 8% issued at par note, payable to Key Bank. Key Bank agrees to accept from Nicholas equipment that has a fair value of 1,450,000, originally costing $2,400,000, with accumulated depreciation of $1,250,000. Key Bank also extends the maturity date to December 31, 2021, reduces the face amount of the note to $1,250,000, and reduces the interest rate to 6%, with interest payable at the end of each year.

a. Nicholas should recognize a gain or loss on the transfer of the equipment of:

b. At the end of each of the next three years Nicholas records the $ 75,000 interest paid to Key Bank as a:

c. In determining the carrying value of the note at December 31, 2018 Key Bank uses an effective interest rate equal to:

d. Key Bank records a loss on restructuring of:

e. In recording the loss on restructuring, Key bank