On December 31, 2020, RBC Bank enters into a debt restructuring agreement with Smiths Inc., which is now experiencing financial trouble. The bank agrees to restructure a $2- million, 12% note receivable issued at par by the following modifications: Reducing the principal obligation from $2 million to $1.5 million Extending the maturity date from December 31, 2020, to December 31, 2023 Reducing the interest rate from 12% to 10%. The current market rate is 9%. Smiths pays interest at the end of each year. On January 1, 2024, Smiths Inc. pays $1.5 million in cash to RBC Bank. Simpsons prepares financial statements in accordance with ASPE. 1. Determine whether the modifications are considered substantial or not. 2. Record the needed journal entry, if any, by Simpsons Inc. on December 31,2020