On December 31, 2020, Green Bank enters into a debt restructuring agreement with Teal Mountain Inc., which is now experiencing financial trouble. The bank agrees to restructure a $2.6-million, 12% note receivable issued at par by the following modifications:

1.		Reducing the principal obligation from $2.6 million to $2.08 million
2.		Extending the maturity date from December 31, 2020, to December 31, 2023
3.		Reducing the interest rate from 12% to 10%

Teal Mountain pays interest at the end of each year. On January 1, 2024, Teal Mountain Inc. pays $2.08 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 Teal Mountain can record a gain under this term modification. select an option YesNo 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 Teal Mountains 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
enter an account title	enter a debit amount	enter a credit amount
enter an account title

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

Rate of intrest applied

enter Rate of intrest applied in percentages 1012

%

Prepare the amortization schedule of the note for Teal Mountain after the debt restructuring.

TEAL MOUNTAIN 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								$enter a dollar amount
12/31/21		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		enter a dollar amount
12/31/22		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
12/31/23		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
Total		$enter a total amount		$enter a total amount

Prepare the interest payment entry for Teal Mountain 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	enter an account title for the journal entry on December 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on December 31

What entry should Teal Mountain 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	enter an account title