Question
Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $25 million, 10% unsecured note. The note was signed January 1, 2008, and
Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $25 million, 10% unsecured note. The note was signed January 1, 2008, and was due December 31, 2019. Annual interest was last paid on December 31, 2014. At January 1, 2016, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the journal entry by First Lincoln Bank to record the restructuring under each of the independent circumstances below:
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