Smith Co. owes $150,000 to Lakeshore Inc. on a 10-year, 13% note due on December 31, 2020. The note was issued at par. Because Smith is in financial trouble, Lakeshore Inc. agrees to extend the maturity date to December 31, 2022, reduce the principal to $90,000, and reduce the interest rate to 6%, payable annually on December 31. The market rate is currently 6%.

Prepare the journal entries on Smith's books on December 31, 2020, 2021, and 2022.