Question: More Ecclesiastical (ME) borrowed $165.0 m from Cromwell Guaranty & Trust (CGT) on a twenty-year note that required quarterly payments of $3.4 m. Shortly after

More Ecclesiastical (ME) borrowed $165.0 m from Cromwell Guaranty & Trust (CGT) on a twenty-year note that required quarterly payments of $3.4 m. Shortly after making the 26th payment the marketing prospects for MEs principal product line deteriorated and the head of the business was summarily removed. ME and CGT agreed to restructure the note by decreasing each quarterly payment by $600 K and guaranteeing payments through the assignment of property rights to a portfolio of real estate.

Required: Book the restructuring and the first subsequent payment (#27) for ME and CGT.

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