Tyre Recycling Inc. (TRI) operates a tire recycling plant in Murdochville, QC. Three years ago it acquired all of the shares of Tyre Distributors Corp. which sells tires to Canadian Tire and other big box stores. Its bank had provided some of the financing for the acquisition in the form of a $4,000,000, 3 year note, with an interest rate of 5% (paid annually) with a due date of December 31, 2021. TRI is having cash flow issues, and will be unable to reimburse this note and two years of unpaid interest on the due date. It approached the bank for concessions in November, 2021. Both parties adopted IFRS. The bank and TRI have agreed on the following: -The existing note will be replaced with a revised note bearing interest at 3% annually with a due date of December 31, 2024 and a face value of $3,700,000.

The unpaid interest will be forgiven. -TRI will convey to the bank a vacant storage building having a net book value of $220,000 and fair value of $250,000 as the renegotiation fee on December 31, 2021. -The market rate of interest is 4%. Question 26 Not yet answered Marked out of 2.00 Flag question Question text [26] The determination of whether this re-financing is a major or minor settlement will involve comparing a value of A- the renegotiated debt plus payments made and/or asset given, with B- the amount of the obligation forgiven. These amounts as calculated respectively, will be (A- $; B- $).