On December 31, 2025, American Bank enters into a debt restructuring agreement with Pharoah Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $4,260,000 note receivable by the following modifications: 1. 2. 3. Reducing the principal obligation from $4,260,000 to $3,408,000. Extending the maturity date from December 31, 2025, to January 1, 2029. Reducing the interest rate from 12% to 10%. Pharoah pays interest at the end of each year. On January 1, 2029, Pharoah Company pays $3,408,000 in cash to American Bank. (a) Will the gain recorded by Pharoah be equal to the loss recorded by American Bank under the debt restructuring? eTextbook and Media List of Accounts Save for Later MacBook Pro Attempts: 0 of 15 used Submit Answer

Can Pharoah Company record a gain under the term modification mentioned above? eTextbook and Media List of Accounts Attempts: 2 of 15 used Assuming that the interest rate Pharoah should use to compute interest expense in future periods is 1.4276%, prepare the interest payment schedule of the note for Pharoah Company after the debt restructuring. (Round answers to 0 decimol places, es. 38,548.1 eTextbook and Media List of Accounts b) Can Pharoah Company record a gain under the term modification mentioned above? Assuming that the interest rate Pharoah should use to compute interest expense in future periods is 1.4276%, prepare the interest payment schedule of the note for Pharoah Company after the debt restructuring. (Round answers to 0 decimal places, es. 38,548 .) What entry should Pharoah make on January 1,2029? (Round answers to 0 decimal places, es. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.) Prepare the interest payment entry for Pharoah Company on December 31, 2027. (Round answers to 0 decimal places, eg. 38,548. If no entry is required, select "No Entry" for the occount titles and enter O for the amounts. Credit account titles are automgtically indented when the amount is entered. Do not indent manually, List all debit entries before credit entries.) On December 31,2025 , American Bank enters into a debt restructuring agreement with Pharoah Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $4,260,000 note receivable by the following modifications: 1. Reducing the principal obligation from $4,260,000 to $3,408,000. 2. Extending the maturity date from December 31,2025 , to January 1,2029. 3. Reducing the interat rate from 12% to 10%. Pharoah pays interest at the end of each year. On January 1,2029, Pharoah Company pays $3,408,000 in cash to American Bank. (a) Will the gain recorded by Pharoah be equal to the loss recorded by American Bank under the debt restructuring