"P14-130 [LO10) (Restructure of Note under Different Circumstances) Pinker Corporation is having financial difficulty and therefore has asked Red Meadow State Bank to restructure its $1 million note outstanding. The present note has 2 years remain- ing and pays a current rate of interest of 8%. The present market rate for a loan of this nature is 12%. The note was issued at its face value. Instructions Presented below are four independent situations. Prepare the journal entry that Pinker and Red Meadow State Bank would make for each of these restructurings. (2) Red Meadow State Bank agrees to take an equity interest in Pinker by accepting common stock valued at $500,000 in exchange for relinquishing its claim on this note. The common stock has a par value of $50 000. (b) Red Meadow State Bank agrees to accept land in exchange for relinquishing its claim on this note. The land has a book value of $500,000 and a fair value of $900,000. (c) Red Meadow State Bank agrees to modify the terms of the note, indicating that Pinker does not have to pay any interest on the note over the 2-year period. (d) Red Meadow State Bank agrees to reduce the principal balance due to $575,000 and require interest only in the second year at a rate of 15%%