At January 1, 2024, Clayton Hoists Incorporated owed Third BancCorp $31 million, under a 10% note due December 31, 2025. Interest was paid last on December 31, 2022. Clayton was experiencing severe financial difficulties and asked Third BancCorp to modify the terms of the debt agreement. After negotiation Third BancCorp agreed to do the following: Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) • Forgive the interest accrued for the year just ended. • Reduce the remaining two years' interest payments to $1 million each. • Reduce the principal amount to $30 million. Required: 1-3. Prepare the journal entries by Third BancCorp necessitated by the restructuring of the debt at January 1, 2024, December 31, 2024 and December 31, 2025. Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar amount. View transaction list Record the restructuring of the debt at January 2 Record the 2024 interest revenue. 1 3 Record the 2025 interest revenue. 4 Record the collection of the note receivable. Note : = journal entry has been entered Record entry Clear entry X Credit View general journal
At January 1, 2024, Clayton Hoists Incorporated owed Third BancCorp $31 million, under a 10% note due December 31, 2025. Interest was paid last on December 31, 2022. Clayton was experiencing severe financial difficulties and asked Third BancCorp to modify the terms of the debt agreement. After negotiation Third BancCorp agreed to do the following: Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) • Forgive the interest accrued for the year just ended. • Reduce the remaining two years' interest payments to $1 million each. • Reduce the principal amount to $30 million. Required: 1-3. Prepare the journal entries by Third BancCorp necessitated by the restructuring of the debt at January 1, 2024, December 31, 2024 and December 31, 2025. Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar amount. View transaction list Record the restructuring of the debt at January 2 Record the 2024 interest revenue. 1 3 Record the 2025 interest revenue. 4 Record the collection of the note receivable. Note : = journal entry has been entered Record entry Clear entry X Credit View general journal
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:At January 1, 2024, Clayton Hoists Incorporated owed Third BancCorp $31 million, under a 10% note due December 31, 2025. Interest
was paid last on December 31, 2022. Clayton was experiencing severe financial difficulties and asked Third BancCorp to modify the
terms of the debt agreement. After negotiation Third BancCorp agreed to do the following:
Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
●
Forgive the interest accrued for the year just ended.
• Reduce the remaining two years' interest payments to $1 million each.
●
Reduce the principal amount to $30 million.
Required:
1-3. Prepare the journal entries by Third BancCorp necessitated by the restructuring of the debt at January 1, 2024, December 31,
2024 and December 31, 2025.
Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the
first account field. Round your final answers to nearest whole dollar amount.
View transaction list
1 Record the restructuring of the debt at January 1.
2 Record the 2024 interest revenue.
3 Record the 2025 interest revenue.
4
Record the collection of the note receivable.
Note :
= journal entry has been entered
Record entry
Clear entry
X
Credit
View general journal
>
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