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  3. on 1/1/2020, the key bank granted a loan to xyz co

On 1/1/2020, the Key Bank granted a loan to XYZ Company of $5,000,000 with 10%...

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Accounting

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On 1/1/2020, the Key Bank granted a loan to XYZ Company of $5,000,000 with 10% interest payable at end of each year (12/31...). The loan due after 4 years and XYZ Company signed a note payable for the loan amount. XYZ was able to pay the interest for 2020 and 2021. At end of year 3 (2022), XYZ Company was financial difficulty and did not pay due interest. In January 2023 (beginning of year 4, the key bank assessed the loan situation and agreed with XYZ to restructure the loan as follows: a. Forgive the accrued interest of year 3 b. Extend the maturity of the note 2 more years c. Reduce interest rate to $300,000 a year d. Reduce the principal of the loan to $3,000,000. Required: Make the necessary restructuring entries to implement the agreement in the books of both: a. The bank b. XYZ Company

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