On December $31,2025,$ American Bank enters into a debt restructuring agreement with Nash Company, which is now experiencing financial trouble. The bank agrees to restructure a $12\backslash \%,$ issued at par, $\backslash$$$2,800,000$ note receivable by the following modifications: $1.$ Reducing the principal obligation from $\backslash (\backslash$$ $2,800,000\backslash )$ to $\backslash (\backslash$$ $1,860,000\backslash ).2.$ Extending the maturity date from December $31,2025,$ to January $1,2029.3.$ Reducing the interest rate from $\backslash (12\backslash \%\backslash )$ to $\backslash (10\backslash \%\backslash ).$ Nash pays interest at the end of each year. On January $1,2029,$ Nash Company pays $\backslash (\backslash$$ $1,860,000\backslash )$ in cash to American Bank.

Prepare the journal entries to record the gain on Nash's books. $($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.$)$

December

$31,2025$

Notes Payable

Gain on Restructuring of Debt

What interest rate should Nash use to compute its interest expense in future periods? $($Do not leave any answer field blank. Enter $0$

for amounts.$)$

Interest rate

$\%$

eTextbook and Media

List of Accounts

Attempts: $0$ of $5$ used

$($d$)$

Prepare the interest payment schedule of the note for Nash Company after the debt restructuring.

NASH COMPANY

Interest Payment Schedule After Debt Restructuring

Effective$-$Interest Rate

Cash

Paid

Interest

Expense

Reduction

of Carrying

Amount

Cal

Va

N

Prepare the interest payment entries for Nash Company on December $31,$ of $2026,2027,$ and $2028.($Record entries in the order

displayed in the problem statement. 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

$($f$)$ what entry should Nash make on January $1,2029$