On December 31, 2020, American Bank enters into a debt restructuring agreement with Waterway Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $3,680,000 note receiva

Waterway pays interest at the end of each year. On January 1, 2024, Waterway Company pays $2,944,000 in cash to American Bank.

1.

1.		Reducing the principal obligation from $3,680,000 to $2,944,000.
2.		Extending the maturity date from December 31, 2020, to January 1, 2024.
3.		Reducing the interest rate from 12% to 10%.

Waterway pays interest at the end of each year. On January 1, 2024, Waterway Company pays $2,944,000 in cash to American Bank.

Assuming that the interest rate Waterway should use to compute interest expense in future periods is 1.4276%, prepare the interest payment schedule of the note for Waterway Company after the debt restructuring. (Round answers to 0 decimal places, e.g. 38,548.)

WATERWAY COMPANY Interest Payment Schedule After Debt Restructuring Effective-Interest Rate
Date		Cash Paid		Interest Expense		Reduction of Carrying Amount		Carrying Amount of Note
12/31/20		$		$		$		$
12/31/21
12/31/22
12/31/23
Total		$		$		$

Prepare the interest payment entry for Waterway Company on December 31, 2022. (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, 2022

Waterway pays interest at the end of each year. On January 1, 2024, Waterway Company pays $2,944,000 in cash to American Bank.

1.		Reducing the principal obligation from $3,680,000 to $2,944,000.
2.		Extending the maturity date from December 31, 2020, to January 1, 2024.
3.		Reducing the interest rate from 12% to 10%.

Waterway pays interest at the end of each year. On January 1, 2024, Waterway Company pays $2,944,000 in cash to American Bank.

1.		Reducing the principal obligation from $3,680,000 to $2,944,000.
2.		Extending the maturity date from December 31, 2020, to January 1, 2024.
3.		Reducing the interest rate from 12% to 10%.

Waterway pays interest at the end of each year. On January 1, 2024, Waterway Company pays $2,944,000 in cash to American Bank.