Shamrock Corp. owes Pharoah Corp. a $119,700, 10-year, 10% note issued at par plus $11,970 of accrued interest. The note is due today, December 31, 2020. Because Shamrock Corp. is in financial trouble, Pharoah Corp. agrees to forgive the accrued interest and $10,840 of the principal, and to extend the maturity date to December 31, 2023. Interest at 10% of the revised principal will continue to be due on December 31 of each year. Assume the market rate of interest is 10% at the date of refinancing. Shamrock and Pharoah prepare financial statements in accordance with IFRS. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.

Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, determine if this is a settlement or a modification. (Hint: Refer to Chapter 3 for tips on calculating.)

Prepare a schedule of the debt reduction and interest expense for the years 2020 through 2023. (Do not leave any answer field blank. Enter 0 for amounts.)

Date Cash Interest Effective Interest (Market) Chang A 12/31/20 12/31/21 $ $ $ 12/31/22 12/31/23 12/31/23

Calculate the gain or loss for Pharoah Corp. and prepare a schedule of the receivable reduction and interest income for the years 2020 through 2023. (Round answersto 0 decimal places, e.g. 5,275. Do not leave any answer field blank. Enter 0 for amounts.) on restructure $ Pharoah Corp. Date Cash Interest Effective Interest (Market) Change Amount of Note 12/31/20 12/31/21 $ $ $ 12/31/22 12/31/23 12/31/23

Prepare all the necessary journal entries on the books of Shamrock Corp. for the years 2020, 2021, and 2022. (Round answersto 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Dec. 31, 2020

Prepare all the necessary journal entries on the books of Pharoah Corp. for the years 2020, 2021, and 2022. Assume that Pharoah had not previously recognized any impairment. (Round answersto 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry isrequired,select "No Entry" for the account titles and enter 0 for the amounts.)