On December 31, 2025, American Bank enters into a debt restructuring agreement with Novak Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $2,930,000 note receivable by the following modifications: 1. Reducing the principal obligation from $2,930,000 to $2.344,000. 2. Extending the maturity date from December 31, 2025, to January 1, 2029. 3. Reducing the interest rate from 12% to 10% Novak pays interest at the end of each year. On January 1, 2029, Novak Company pays $2,344,000 in cash to American Bank (a)