Whiley Company issued a $100,000, five-year, 10% note to Security Company on January 2, 2019. Interest was to be paid annually each December 31. The stated rate of interest reflected the market rate of interest on similar notes. Whiley made the first interest payment on December 31, 2019. Owing to financial difficulties, the firm was unable to pay any interest on December 31, 2020. Security Co. agreed to the following terms: The $100,000 principal would be payable in five equal installments, beginning December 31, 2020. The accrued interest at December 31, 2020, would be forgiven. Whiley would be required to make no other payments. Because of the risk associated with the note, it has no determinable fair value. The note is secured by equipment having a fair value of $80,000 at December 31, 2020. The present value of the five equal installments discounted at 10% is $75,815. Required: