On December 31, 2020, Zettlein Bank enters into a debt restructuring agreement with Vaughn Company, which...

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On December 31, 2020, Zettlein Bank enters into a debt restructuring agreement with Vaughn Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $9,400,000 note receivable by the following modifications: 1 Reducing the principal obligation from $9,400,000 to $7,520,000. 2. Extending the maturity date from December 31, 2020, to December 31, 2023, 3. Reducing the interest rate from 12% to 10%. Vaughn pays interest at the end of each year. On December 31, 2023, Vaughn Company pays $7,520,000 in cash to Zettlein Bank. On December 31, 2020, Zettlein Bank enters into a debt restructuring agreement with Vaughn Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $9,400,000 note receivable by the following modifications: 1 Reducing the principal obligation from $9,400,000 to $7,520,000. 2. Extending the maturity date from December 31, 2020, to December 31, 2023, 3. Reducing the interest rate from 12% to 10%. Vaughn pays interest at the end of each year. On December 31, 2023, Vaughn Company pays $7,520,000 in cash to Zettlein Bank.