On December 31, 2020, Green Bank enters into a debt restructuring agreement with Sage Hill Inc., which is now experiencing financial trouble. The bank agrees to restructure a $2.4-million, 11% note receivable issued at par by the following modifications:

1.		Reducing the principal obligation from $2.4 million to $2.28 million
2.		Extending the maturity date from December 31, 2020, to December 31, 2023
3.		Reducing the interest rate from 11% to 9%

Sage Hill pays interest at the end of each year. On January 1, 2024, Sage Hill Inc. pays $2.28 million in cash to Green Bank. Sage Hill prepares financial statements in accordance with IFRS 9.

Prepare an entry at December 31, 2020, based on the results of your calculation. (Round answers to 0 decimal places, e.g. 5,275. 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
December 31, 2020

Prepare an effective interest amortization table for the remaining term of the note. (Round answers to 0 decimal places, e.g. 5,250.)

SAGE HILL INC. INTEREST PAYMENT SCHEDULE AFTER DEBT RESTRUCTURING

Date

Cash Interest

Effective Interest

Increase 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 Sage Hill on December 31, 2022, and the entry on January 1, 2024. (Round answer to 0 decimal places, e.g. 5,275. 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
December 31, 2022January 1, 2024
December 31, 2022January 1, 2024

Assume instead that Sage Hill follows ASPE. Using (1) a financial calculator or (2) Excel function Rate, calculate the rate of interest that Sage Hill should use to calculate its interest expense in future periods. (Hint: Refer to Chapter 3 for tips on calculating.) (Round answer to 4 decimal places, e.g. 1.2246%.)

Rate of interest

Enter your answer in accordance to the question statement %

Continuing the assumption of following ASPE, prepare an effective interest amortization table for the remaining term of the note. (Round yield values to 4 decimal places, e.g. 52.7525 and final answers to 0 decimal places, e.g. 5,250.)

SAGE HILL INC. INTEREST PAYMENT SCHEDULE AFTER DEBT RESTRUCTURING

Date

Cash Interest

Effective Interest

Reduction of Carrying Amount

Carrying Amount of Note

12/31/20

$

12/31/21

$

$

$

12/31/22

12/31/23

Total

$

$

$

Continuing the assumption of following ASPE, prepare the interest payment entry for Sage Hill on December 31, 2022, and the entry on January 1, 2024. (Round answer to 0 decimal places, e.g. 5,275. 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
December 31, 2022
January 1, 2024