On December 31, 2020, Blue Co. is in financial difficulty and cannot pay a note due that day. It is a $2,400,000 note with $240,000 accrued interest payable to Blossom, Inc. Blossom agrees to forgive the accrued interest, extend the maturity date to December 31, 2022, and reduce the interest rate to 4%. The present value of the restructured cash flows is $2,054,400.

(a)

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Your answer is correct.

Prepare entry for the restructure on Blue's books. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit

eTextbook and Media

List of Accounts

Attempts: 1 of 3 used

(b)

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Your answer is correct.

Prepare entry for the payment of interest on December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31

eTextbook and Media

List of Accounts

Attempts: 1 of 3 used

(c)

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Your answer is partially correct.

Prepare entry for the restructure on Blossom's books. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit