On December 31, 2020, Martinez Bank enters into a debt restructuring agreement with Barkley Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $4,500,000 note receivable by the following modifications:

1.		Reducing the principal obligation from $4,500,000 to $3,600,000.
2.		Extending the maturity date from December 31, 2020, to January 1, 2024.
3.		Reducing the interest rate from 12% to 10%.

Barkley pays interest at the end of each year. On January 1, 2024, Barkley Company pays $3,600,000 in cash to Martinez Bank. Answer the following questions related to Martinez Bank (creditor)

(1) Compute the loss that Martinez Bank will suffer from the debt restructuring. (Round answer to 0 decimal places, e.g. 38,548.)

Loss on restructuring of debt

? (2) Prepare the journal entry to record the loss. (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, 2020