On January 1, 2017, TWO Company issued a $2,000,000, 6-year, zero-interest-bearing note to Denton International Bank. The note was issued to yield 6% annual interest. Unfortunately, during 2018, TWO fell into financial trouble due to increased competition. After reviewing all available evidence on December 31, 2018, Denton International Bank decided that the loan was impaired. TWO will probably pay back only $950,000 of the principal at maturity

Instructions(a) Prepare journal entries for both TWO Company and TWO International Bank to record the issuance of the note on January 1, 2017. (Round to the nearest $10.)

(b) Prepare the amortization schedule for the note that shows the amount of principal and interest to be paid each year, assuming the loan is not impaired

(c) Under what circumstances can Denton International Bank consider TWOs note to be impaired?

(d) Compute the loss TWO International Bank will suffer from TWOs financial distress on December 31, 2018. What journal entries should be made to record this loss?