Oriole Corp.currently has an issued debenture outstanding with Abbra Bank. The note has a principal of $ 4 million, was issued at face value, and interest is payable at 7%. The term of the debenture was 10 years, and was issued on December 31, 2013. The current market rate for this debenture is 9%. Oriole Corp. has been experiencing financial difficulties and has asked Abbra Bank to restructure the note. Both Oriole and Abbra Bank prepare financial statements in accordance with IFRS. It is currently December 31, 2020. For each of the following independent situations related to the above scenario, prepare the journal entries that Oriole Corp. and Abbra Bank would make for the restructuring that is described. Abbra Bank agrees to reduce the principal to $ 1.7 million and require interest only in the third year at 4%, waiving the first 2 years' worth of interest. (Hint: Refer to Chapter 3 for tips on calculating and use the time value of money tables.) Assume that the bank had not previously recognized any loss on impairment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) On the books of Oriole Corporation: Account Titles and Explanation Debit Credit Modification Gain or Loss No Entry Notes Payable Notes Receivable Loss on Disposal of Buildings Investment in Property Gain on Disposal of Buildings Allowance for Doubtful Accounts FV-NI Investments Loss on Restructuring of Debt Common Shares Buildings Gain on Restructuring of Debt Accumulated Depreciation - Buildings Cash O Debit Credit Abbra Bank has agreed to accept a building in exchange for relinquishing this debenture. The building has a carrying amount of $ 600,000 (original cost was $ 1,800,000) and a fair value of $ 3.5 million. Assume that the bank had already recognized a loss on impairment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) On the books of Oriole Corporation: Account Titles and Explanation Debit Credit Accumulated Depreciation - Buildings 1,200,000 > Notes Payable 4,000,000 Gain on Disposal of Buildings > 2,900,000 Buildings 1,800,000 Gain on Disposal of Buildings > 500,000 On the books of Abbra Bank: Account Titles and Explanation Debit Credit Investment in Property 3,500,000 Allowance for Doubtful Accounts > 500,000 Activate Windows Go to Settings to activate Notes Receivable > 4,000,000 Oriole Corp.currently has an issued debenture outstanding with Abbra Bank. The note has a principal of $ 4 million, was issued at face value, and interest is payable at 7%. The term of the debenture was 10 years, and was issued on December 31, 2013. The current market rate for this debenture is 9%. Oriole Corp. has been experiencing financial difficulties and has asked Abbra Bank to restructure the note. Both Oriole and Abbra Bank prepare financial statements in accordance with IFRS. It is currently December 31, 2020. For each of the following independent situations related to the above scenario, prepare the journal entries that Oriole Corp. and Abbra Bank would make for the restructuring that is described. Abbra Bank agrees to reduce the principal to $ 1.7 million and require interest only in the third year at 4%, waiving the first 2 years' worth of interest. (Hint: Refer to Chapter 3 for tips on calculating and use the time value of money tables.) Assume that the bank had not previously recognized any loss on impairment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) On the books of Oriole Corporation: Account Titles and Explanation Debit Credit Modification Gain or Loss No Entry Notes Payable Notes Receivable Loss on Disposal of Buildings Investment in Property Gain on Disposal of Buildings Allowance for Doubtful Accounts FV-NI Investments Loss on Restructuring of Debt Common Shares Buildings Gain on Restructuring of Debt Accumulated Depreciation - Buildings Cash O Debit Credit Abbra Bank has agreed to accept a building in exchange for relinquishing this debenture. The building has a carrying amount of $ 600,000 (original cost was $ 1,800,000) and a fair value of $ 3.5 million. Assume that the bank had already recognized a loss on impairment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) On the books of Oriole Corporation: Account Titles and Explanation Debit Credit Accumulated Depreciation - Buildings 1,200,000 > Notes Payable 4,000,000 Gain on Disposal of Buildings > 2,900,000 Buildings 1,800,000 Gain on Disposal of Buildings > 500,000 On the books of Abbra Bank: Account Titles and Explanation Debit Credit Investment in Property 3,500,000 Allowance for Doubtful Accounts > 500,000 Activate Windows Go to Settings to activate Notes Receivable > 4,000,000