Answer the problem below. Provide journal entries.

• On December 31, 2024, Ana Company is experiencing extreme financial pressure and is in default in meeting interest payment on its long-term note of P 6,000,000 due on December 31, 2025. The 10% interest rate is payable every December 31.

In an agreement with the creditor, Ana Company obtained the following changes in terms of the note:

The accrued interest on December 31, 2024 is forgiven

The principal amount is reduced to P 3,000,000

The new interest rate is 8%.

The new maturity date is December 31, 2030.

At the time of restructuring, the market interest rate was 10%. At what amount would Ana report as gain on debt restructuring? What is the carrying value of the notes payable as of December 31, 2027? How much interest expense shall be reported on December 31, 2026 statement of financial performance?

Prepare journal entries at

a. ) December 31, 2024

b.) December 31, 2025

c. December 31, 2026

d.) December 31, 2028

e. December 31, 2030.