Question: On December 3 1 , 2 0 2 3 , AC 3 2 2 0 Inc. is in financial difficulty and cannot pay a $

On December 31,2023, AC3220 Inc. is in financial difficulty and cannot pay a $175,000 note (with $17,500 accrued interest payable) to AC1350 Corp. AC1350 agrees to forgive the accrued interest, extend the maturity date to December 31,2025, and reduce the interest rate to 4%. The present value of the restructured cash flows is $149,750.
Instructions
Prepare entries for the following:
a) the restructure on AC3220's books.
b) the payment of interest on December 31,2024

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