On December $31,2025,$ American Bank enters into a debt restructuring agreement with Novak Company, which is now experiencing financial trouble. The bank agrees to restructure a $12\%,$ issued at par, $$3,970,000$ note receivable by the following modifications: Reducing the principal obligation from $$3,970,000$ to $$3,176,000.$ Extending the maturity date from December $31,2025,$ to January $1,2029.$ Reducing the interest rate from $12\%$ to $10\%.$ Novak pays interest at the end of each year. On January $1,2029,$ Novak Company pays $$3,176,000$ in cash to American Bank. Assuming that the interest rate Novak should use to compute interest expense in future periods is $\backslash (1\mathrm{.}4276\backslash \%\backslash ),$ prepare the interest payment schedule of the note for Novak Company after the debt restructuring. $($Round answers to $0$ decimal places, e$.$g$.\backslash (38,548\backslash ).)$ Prepare the interest payment entry for Novak Company on December $31,2027.($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 the amount is entered. Do not indent manually. List all debit entries before credit entries.$)$

Date

Account Titles and Explanation

Debit

Credit

December $31,2027$

Interest Expense What entry should Novak make on January $1,2029?($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 the amount is entered. Do not indent manually. List debit entry before credit entry.$)$

Date

Account Titles and Explanation

Debit

Credit

December $31,2029$