PLEASE ANSWER ALL PARTS, PLEASE SHOW ALL WORK, PLEASE TYPE ANSWER Exercise 14 22 On December 31, 2017, American Bank enters into a debt restructuring agreement with Ivanhoe Company, which is now experiencing financial trouble The bank agrees to restructure a 12 , issued at par, $3,400,000 note receivable by the following modifications 1 Reducing the principal obligation from $3,400,000 to $2,720,000 2 Extending the maturity date from December 31, 2017, to January 1, 2021 3 Reducing the interest rate from 12 to 10 Ivanhoe pays interest at the end of each year On January 1, 2021, Ivanhoe Company pays $2,720,000 in cash to American Bank 1 Reducing the principal obligation from $3,400,000 to $2,720,000 2 Extending the maturity date from December 31, 2017, to January 1, 2021 3 Reducing the interest rate from 12 to 10 Assuming that the interest rate Ivanhoe should use to compute interest expense in future periods is 1 4276 , prepare the interest payment schedule of the note for Ivanhoe Company after the debt restructuring IVANHOE COMPANY Interest Payment Schedule After Debt Restructuring Effective Interest Rate Date Cash Paid Interest Expense Reduction of Carrying Amount Carrying Amount of Note 12 31 17 $ $ $ $ 12 31 18 12 31 19 12 31 20 Total $ $ $ (Round answers to 0 decimal places, e g 38,548 If no entry is required, select No Entry for the account titles and enter 0 for the amounts Credit account titles are automatically indented when amount is entered Do not indent manually ) Prepare the interest payment entry for Ivanhoe Company on December 31, 2019 Date Account Titles and Explanation Debit Credit December 31, 2019 (Round answers to 0 decimal places, e g 38,548 If no entry is required, select No Entry for the account titles and enter 0 for the amounts Credit account titles are automatically indented when amount is entered Do not indent manually ) Date Account Titles and Explanation Debit Credit December 31, 2021 What entry should Ivanhoe make on January 1, 2021 Date Account Titles and Explanation Debit Credit December 31, 2021 Click if you would like to Show Work for this question Open Show Work

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PLEASE ANSWER ALL PARTS, PLEASE SHOW ALL WORK, PLEASE TYPE ANSWER Exercise 14-22 On December 31, 2017, American Bank enters into a debt restructuring agreement

PLEASE ANSWER ALL PARTS, PLEASE SHOW ALL WORK, PLEASE TYPE ANSWER

Exercise 14-22

On December 31, 2017, American Bank enters into a debt restructuring agreement with Ivanhoe Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $3,400,000 note receivable by the following modifications:

Reducing the principal obligation from $3,400,000 to $2,720,000.

Extending the maturity date from December 31, 2017, to January 1, 2021.

Reducing the interest rate from 12% to 10%.

Ivanhoe pays interest at the end of each year. On January 1, 2021, Ivanhoe Company pays $2,720,000 in cash to American Bank.

1.		Reducing the principal obligation from $3,400,000 to $2,720,000.
2.		Extending the maturity date from December 31, 2017, to January 1, 2021.
3.		Reducing the interest rate from 12% to 10%.


	Assuming that the interest rate Ivanhoe should use to compute interest expense in future periods is 1.4276%, prepare the interest payment schedule of the note for Ivanhoe Company after the debt restructuring.

IVANHOE COMPANY Interest Payment Schedule After Debt Restructuring Effective-Interest Rate
Date	Cash Paid	Interest Expense	Reduction of Carrying Amount	Carrying Amount of Note
12/31/17	$	$	$	$
12/31/18
12/31/19
12/31/20
Total	$	$	$

(Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)