At January 1, year 3, Mars Industries, Inc., owed Second Public Bank $13 million under a 13% note due December 31, year 5. Interest was paid last on December 31, year 1. Mars was experiencing severe financial difficulties and asked Second Public Bank to modify the terms of the debt agreement.
a. Forgive the interest accrued for the year just ended.
b. Reduce the remaining two years’ interest payments to $1 million each and delay the first payment until December 31, year 4
c. Reduce the unpaid principal amount to $12 million.
Required:
Prepare the journal entries by Mars Industries, Inc., necessitated by the restructuring of the debt at (1) January 1, year 3; (2) December 31, year 4; and (3) December 31, year 5
At January 1, year 3, Mars Industries, Inc., owed Second Public Bank $13 million under a...
At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $19 million under a 10% note due December 31, 2023. Interest was paid last on December 31, 2019. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to: a. Forgive the interest accrued for the year just ended. 6. Reduce the remaining two years' interest payments to $1 million each and delay the first payment until...
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At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $22 million under a 10% note due December 31, 2023. Interest was paid last on December 31, 2019. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to: Forgive the interest accrued for the year just ended. Reduce the remaining two years’ interest payments to $2 million each and delay the first payment until December 31,...
Check my work At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $26 million under a 10% note due December 31, 2023. Interest was paid last on December 31, 2019. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to a. Forgive the interest accrued for the year just ended. 6. Reduce the remaining two years interest payments to $2 million each and delay the...
At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $20 million under a 10% note due December 31, 2023. Interest was paid last on December 31, 2019. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify th terms of the debt agreement. After negotiation Second BancCorp agreed to: a. Forgive the interest accrued for the year just ended. b. Reduce the remaining two years' interest payments to $1 million each and delay the first payment until...
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At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $16 million under a 10% note due December 31, 2023. Interest was paid last on December 31, 2019. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to: a. Forgive the interest accrued for the year just ended. 5. Reduce the remaining two years' interest payments to $1 million each and delay the first payment until...
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4 HW Problems Help Save & Exit Sub my wor Exercise 14-34 Troubled debt restructuring; modification of terms [Appendix B] At January 1, 2018, Brainard Industries, Inc., owed Second Bancorp $26 million under a 10% note due December 31, 2020. Interest was paid last on December 31, 2016. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to: a. Forgive the interest accrued for the year...