On December $31,2022,$ Sterling Bank enters into a debt restructuring agreement with Grouper plc$,$ which is now experiencing

financial trouble. The bank agrees to restructure a $12\%,$ issued at par, $2,800,000$ note receivable by the following modifications:

Reducing the principal obligation from $2,800,000$ to $2,240,000.$

Extending the maturity date from December $31,2022,$ to January $1,2026.$

Reducing the interest rate from $12\%$ to $10\%.$ Grouper's market rate of interest is $15\%.$

Grouper pays interest at the end of each year. On January $1,2026,$ Grouper pays $2,240,000$ in cash try Sterling Bank.

Can Grouper record a gain under the term modification mentioned above?

$2-$prepare the amortization schedule of the note for Grouper after the debt modification. $($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and the final answer to $0$ decimal places e$.$g$.58,971.)$

GROUPER COMPANY

Amortization Schedule After Debt Modification

Market$-$Interest Rate

Date

Cash

Paid

Interest

Expense

Amortization

Carryi

Valu

$12/31/22$

$$

$12/31/23$

$$

$$

$12/31/24$

$12/31/25$

$$

Total above?

$3-$Prepare the interest payment entry for Grouper on December $31,2024.($Round answers to $0$ decimal places, e$.$g$.38,548.$ If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Credit account titles are automatically indented when amount is entered. Do not

indent manually.

$3-$What entry should Grouper make on January $1,2026?($If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.$)$ above?