Sandhill 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, 2010. The current market rate for this debenture is 9%. Sandhill Corp. has been experiencing financial difficulties and has asked Abbra Bank to restructure the note. Both Sandhill and Abbra Bank prepare financial statements in accordance with IFRS. It is currently December 31, 2017.

Abbra Bank agrees to modify the note by allowing Sandhill to not pay the interest on the note for the remaining period. 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 0 for the amounts. Round discount factors to 6 decimals e.g. 0.527500 and final answers to 0 decimal places, e.g. 5,275.)