On December Green Bank enters into a debt restructuring agreement with Teal Mountain Inc., which is now experiencing
financial trouble. The bank agrees to restructure a $million, note receivable issued at par by the following modifications:
Reducing the principal obligation from $ million to $ million
Extending the maturity date from December to December
Reducing the interest rate from to
Teal Mountain pays interest at the end of each year. On January Teal Mountain pays $ million in cash to Green Bank. Teal
Mountain prepares financial statements in accordance with IFRS
b
Prepare an entry at December based on the results of your calculation. Round answers to decimal places, eg
Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry
is required, select No Entry" for the account titles and enter for the amounts. List debit entry before credit entry.
Date
Account Titles and Explanation
Debit
Credit
December
