On January 1, 2024, a company owed a bank $27 million under a 12% note due December 31, 2026. Interest was last paid on December 31, 2022. The company was experiencing severe financial difficulties and asked the bank to modify the terms of the debt agreement. After negotiation, the bank agreed to: 1. Forgive the interest for 2023 and 2024. 2. Reduce the remaining two years' interest payments to $1.8 million each and delay the first payment until December 31, 2025. 3. Reduce the unpaid principal amount to $26 million. 1. Prepare the journal entry for January 1, 2024. Show your work. 2. Prepare the journal entry for December 31, 2025. 3. Prepare the journal entries for December 31, 2026.

On January 1,2024 , a company owed a bank $27 million under a 12% note due December 31 , 2026. Interest was last paid on December 31,2022 . The company was experiencing severe financial difficulties and asked the bank to modify the terms of the debt agreement. After negotiation, the bank agreed to: 1. Forgive the interest for 2023 and 2024. 2. Reduce the remaining two years' interest payments to $1.8 million each and delay the first payment until December 31, 2025. 3. Reduce the unpaid principal amount to $26 million. 1. Prepare the journal entry for January 1,2024 . Show your work. 2. Prepare the joumal entry for December 31,2025. 3. Prepare the journal entries for December 31, 2026