On December 31, 2020, American Bank enters into a debt restructuring agreement with Blue Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $2.110,000 note receivable by the following modifications: 1. Reducing the principal obligation from $2,110,000 to $1,688,000. Extending the maturity date from December 31, 2020, to January 1, 2024. 3. Reducing the interest rate from 12% to 10%. 2. Blue pays interest at the end of each year. On January 1, 2024. Blue Company pays $1.688.000 in cash to American Bank Part 1 Will the gain recorded by Blue be equal to the loss recorded by American Bank under the debt restructuring? Part 2 Can Blue Company record a gain under the term modification mentioned above? Part 3 Assuming that the interest rate Blue should use to compute interest expense in future periods is 1.4276%, prepare the interest payment schedule of the note for Blue Company after the debt restructuring. (Round answers to decimal places, eg. 38,548.) BLUE COMPANY Interest Payment Schedule After Debt Restructuring Effective-Interest Rate Reduction Cash Interest of Carrying Expense Amount 12/31/20 $ $ $ $ Date Paid 12/31/21 12/31/22 12/31/23 Total $ $ Part 3 Assuming that the interest rate Blue should use to compute interest expense in future periods is 1.4276%, prepare the interest payment schedule of the note for Blue Company after the debt restructuring (Round answers to decimal places, eg. 38,548.) BLUE COMPANY Interest Payment Schedule After Debt Restructuring Effective-Interest Rate Carrying Cash Interest of Carrying Amount of Paid Expense Amount Note S $ Reduction $ $ $ Part 4 Prepare the interest payment entry for Blue Company on December 31, 2022. (Round answers to decimal places, eg. 38,548. 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.) Date Account Titles and Explanation Debit Credit December 31, 2022 Part 5 What entry should Blue make on January 1, 2024? (Round answers to decimal places, eg. 38,548. 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.) Date Account Titles and Explanation Debit Credit December 31, 2024