On December 31, 2020, American Bank enters into a debt restructuring agreement with Splish Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $ 2,000,000 note receivable by the following modifications: 1. 2. Reducing the principal obligation from $2,000,000 to $ 1,300,000 Extending the maturity date from December 31, 2020, to January 1, 2024. Reducing the interest rate from 12% to 10%. 3. Splish pays interest at the end of each year. On January 1, 2024, Splish Company pays $ 1,300,000 in cash to American Bank (a) Your answer is correct Can Splish Company record a gain under this term modification? Yes If yes, compute the gain for Splish Company. If no, enter amount as 0. $ 310000 The gain for Splish Company Prepare the journal entries to record the gain on Splish's books. If no entry is required, select "No Entry for the account titles and enter for the amounts Credit account titles are automatically indented when amount is entered. Do not indent manually) Account Titles and Explanation Debit Credit Notes Payable 310000 Gain on Restructuring of Debt 310000 eTextbook and Media List of Accounts Attempts: 2 of 3 used (c) * Your answer is incorrect. What interest rate should Splish use to compute its interest expense in future periods? (Round answer to O decimal places es 18%) The gain Prepare the interest payment schedule of the note for Splish Company after the debt restructuring SPLISH COMPANY Interest Payment Schedule After Debt Restructuring Effective-Interest Rate Reduction Interest of Carrying Expense Amount Date Cash Paid 12/31/20 $ 12/31/21 12/31/22 LIN 12/31/23 Total Prepare the interest payment schedule of the note for Splish Company after the debt restructuring. SPLISH COMPANY Interest Payment Schedule After Debt Restructuring Effective-Interest Rate Reduction Interest of Carrying Expense Amount Cash Paid Carrying Amount of Note $ $