Albenii Port Authority has had a long-term relationship with a nearby lumber company, which ships a significant amount of lumber through the port. To help finance the lumber company’s operations, Alberni advanced $5 million to the lumber company in return for a promissory note which specified payment of the $5 million plus interest at 10%/a, due at the end of two years. However, due to adverse conditions in the lumber industry', the lumber company' was unable to meet its obligation and pay' Alberni at the end of two years. In light of the importance of the relationship between Alberni and die lumber company, Alberni extended the due date by three years (after the original two years), but increased the repayment amount to $7 million, inclusive of interest. The market interest rate for the loan remained at 10%.
Required:
Record the journal entries relating to the note receivable from the date of issuance to the restructuring date, inclusive.