Each of the following is an independent fact situation involving an extinguishment or restructuring of debt.

Debt A-On January 1, 2015, the company borrowed $3,000,000 after incurring $100,000 of related debt issuance costs. The note had a term of three years and called for quarterly interest only payments based on a stated interest rate of 6%. The effective interest method was used to account for the debt. Although the debtor is not experiencing financial difficulties, after making three quarterly payments, the debt was modified as follows: the due date of the note was extended to December 31, 2017, another $400,000 was advanced on the loan (increasing the face value to $3,400,000), and the stated interest rate was changed to 6.4%. The new debt is assumed to have a fair value of $3,300,000.

Debt B-Assume the same original note as in the above Debt A. The debtor began to experience financial difficulties as evidenced by a downgraded credit rating, serious concern regarding the ability to continue as a going concern, and an inability to service existing debt. After making two quarterly interest payments, the debtor was unable to make the next interest payment. After failing to make the payment, the note was modified as follows: the principal amount of the note was reduced to $2,500,000, only $30,000 of unpaid interest was to be paid at maturity, and the interest rate was reduced to 4%.

Debt C-On January 1, 2014, the company borrowed $6,000,000. The 5-year note calls for semiannual interest payments at the stated rate of 6%. The debtor is experiencing financial difficulties and failed to make the third interest payment. On July 1, 2015, the lender agreed to modify the debt as follows: the unpaid interest was forgiven, the note was extended for five more semiannual periods, and the stated interest rate was reduced to 5%.

Required

In each case, determine the impact on the company's income statement at the time of the transaction and for the first interest payment subsequent to the transaction.