On December 31, 2025, American Bank enters into a debt restructuring agreement with Sage 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 interest rate from 12% to 10%. Sage pays interest at the end of each year. On January 1, 2029, Sage Company pays $3,408,000 in cash to American Bank