On December 31, 2020, Waterway 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, $2,200,000 note receivable by the following modifications: 1. Reducing the principal obligation from $2,200,000 to $1,760,000. $ 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 $1,760,000 in cash to Waterway Bank. Answer the following questions related to Waterway Bank (creditor). (a) Your answer is correct. What interest rate should Waterway Bank use to calculate the loss on the debt restructuring? (Round answer to 0 decimal places, eg. 18%.) ) Interest rate 12 % Attempts: 1 of 3 used (b) Your answer is correct. . (1) Compute the loss that Waterway Bank will suffer from the debt restructuring. (Round answer to 0 decimal places, eg. 38,548.) Loss on restructuring of debt $ 524,545 (2) Prepare the journal entry to record the loss. (If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Date December 31, 2020 Bad Debt Expense 524,545 Allowance for Doubtful Accounts 524,545 Attempts: 1 of 3 used (c) Prepare the interest receipt schedule for Waterway Bank after the debt restructuring. (Round answers to O decimal places, eg. (. 38,548.) WATERWAY BANK Interest Receipt Schedule After Debt Restructuring Effective-Interest Rate Cash Received Interest Revenue Increase in Carrying Amount Carrying Amount of Note $ $ $