On December 31, 2020, Green Bank enters into a debt restructuring agreement with Skysong Inc., which is now experiencing financial trouble. The bank agrees to restructure a $2.3-million, 12% note receivable issued at par by the following modifications:

1.		Reducing the principal obligation from $2.3 million to $1.84 million
2.		Extending the maturity date from December 31, 2020, to December 31, 2023
3.		Reducing the interest rate from 12% to 10%

Skysong pays interest at the end of each year. On January 1, 2024, Skysong Inc. pays $1.84 million in cash to Green Bank for the principal. The market rate is currently 10%.

Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, determine if Skysong can record a gain under this term modification. select an option NoYes Calculate the gain if any. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and Round final answer to 0 decimal places, e.g. 1,525.)

Gain

$enter the Gain in dollars rounded to 0 decimal places

Prepare the journal entries to record the gain (if any) on Skysongs 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

What interest rate should Skysong use to calculate its interest expense in future periods?

Rate of intrest applied in percentages

%

Prepare the amortization schedule of the note for Skysong after the debt restructuring.

SKYSONG INC. INTEREST PAYMENT SCHEDULE AFTER DEBT RESTRUCTURING EFFECTIVE INTEREST RATE
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

Prepare the interest payment entry for Skysong on December 31, 2021, 2022, and 2023. (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, 2021 through 2023

What entry should Skysong make on January 1, 2024? (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
January 1, 2024