Pearl Corp. owes $292,000 to Martinez Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Pearl Corp. is in financial trouble, Martinez Trust agrees to extend the maturity date to December 31, 2022, reduce the principal to $239,000, and reduce the interest rate to 7%, payable annually on December 31.

(a)		Prepare the journal entries on Pearls books on December 31, 2020, 2021, 2022.
(b)		Prepare the journal entries on Martinez Trusts books on December 31, 2020, 2021, 2022.