Whispering AG issued a $140,000,4-$year, $12\%$ note at face value to Flint Hills Bank on January $1,2022,$ and received $140,000$ cash. The note requires annual interest payments each December $31.$

During $2022,$ Whispering experiences financial difficulties. On January $1,2023,$ Whispering negotiates a modification of the terms of the note. Under the modification, Flint Hills Bank agrees to reduce the face value of the note to $123,200$ and to extend the maturity date to January $1,2027.$ Annual interest payments on December $31$ will be made at a rate of $10\%.$ Whispering's market interest rate at the time of the modification is $14\%.$

Prepare Whispering's entries for $($a$)$ the modification on January $1,2023.$ Remove the old note at face value and record the new note in the same journal entry, and $($b$)$ the first interest payment date on December $31,2023.$