Chapter 14, Problem 28E

On January 1, 2019, Northfield Corporation becomes delinquent on a $100,000, 14% note to First National Bank, on which $16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%.

Required:

Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.