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836 SECTION 3 Financial Instruments and Liabilities Required Prepare the journal entry(s to record the restructuring of the debt by Transit Developments, E 14-34 At January 1, 2016, Brainard Industries, Inc., owed Second BancCorp S12 million under a 10% note due December Troubled debt 31, 2018. Interest was paid last on December 31, 2014. Brainard was experiencing severe financial difficulties and restructuring; asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to: modification of a. Forgive the interest accrued for the year just ended. terms b. Reduce the remaining two years' interest payments to si million each and delay the first payment until Appendix B December 31, 2017. c. Reduce the unpaid principal amount to $11 million Required Prepare the journal entries by Brainard Industries, Inc., necessitated by the restructuring of the debt at (1) January 1, 2016; (2) December 31, 2017; and (3) December 31, 2018. E 14-35 At January 1, 2016, NCI Industries, Inc was indebted to First Federal Bank under a s240,000, 10% unsecured note The note Troubled debt