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On December $31,2025,$ American Bank enters into a debt restructuring agreement with Windsor Company, which is now

experiencing financial trouble. The bank agrees to restructure a $12\%,$ issued at par, $$3,760,000$ note receivable by the following

modifications:

Reducing the principal obligation from $$3,760,000$ to $$3,008,000.$

Extending the maturity date from December $31,2025,$ to January $1,2029$

Reducing the interest rate from $12\%$ to $10\%.$

Windsor pays interest at the end of each year. On January $1,2029,$ Windsor Company pays $$3,008,000$ in cash to American Bank

Will the gain recorded by Windsor be equal to the loss recorded by American Bank under the debt restructuring?

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List of Accounts

Attempts: $2$ of $5$ used

$($b$)$

Can Windsor Company record a gain under the term modification mentioned above?

eTextbook and Media

List of Accounts

Attempts: $1$ of $5$ used

$x$ Your answer is incorrect.

Assuming that the interest rate Windsor should use to compute interest expense in future periods is $1\mathrm{.}4276\%,$ prepare the

interest payment schedule of the note for Windsor Company after the debt restructuring. $($Round answers to O decimal places, e$.$g$.$

$38,548.)$

List of Accounts

$(4)$

Prepare the interest payment entry for Windsor Company on December $31,2027.($Round answers to O decimal places, e$.$g$.38,548.$

If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented

$($e$)$

What entry should Windsor make on January $1,2029?($Round answers to O decimal places, e$.$g$.38,548.$ If no entry is required, select

$"$No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered

Do not indent manually. List debit entry before credit entry.$)$