Please do not give image format On December 31, 2020, Flounder Bank enters into a debt restructuring agreement with Barkley Company, which is now experiencingfinancial trouble. The bank agrees to restructure a 12%, issued at par, $4,500,000 note receivable by the following modifications:1. Reducing the principal obligation from $4,500,000 to $3,600,000.2.Extending the maturity date from December 31, 2020, to January 1, 2024.3. Reducing the interest rate from 12% to 10%.Barkley pays interest at the end of each year. On January 1, 2024, Barkley Company pays $3,600,000 in cash to Flounder Bank.Answer the following questions related to Flounder Bank (creditor). (1) Compute the loss that Flounder Bank will suffer from the debt restracturing (Round answer to 0 decimal places, e.g. 38,548.)Loss on restructuring of debt $Show Transcribed TextĆ(2) Prepare the journal entry to record the loss. (If no entry is required, select "No Entry" for the account titles and enter O for theamounts. Credit account titles are automatically indented when amount is entered. Do not indent manually)Date Account Titles and ExplanationDecember31.2020DebitCredit

Debt restructuring is the process through which a borrower and its creditors modify or restructure…

(1) Compute the loss that Flounder Bank will suffer from the debt restracturing (Round answer to 0 decimal places, eg. 38,548.) Loss on restructuring of debt $ O Show Transcribed Text Date Account Titles and Explanation 3 (2) Prepare the journal entry to record the loss. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually) December 31.2020 c Debit Credit