On December $31,2025,$ American Bank enters into a debt restructuring agreement with Sheridan Company, which is now experiencing financial trouble. The bank agrees to restructure a $12\%,$ issued at par, $$3,250,000$ note receivable by the following modifications:

Reducing the principal obligation from $$3,250,000$ to $$2,600,000.$

Extending the maturity date from December $31,2025,$ to January $1,2029.$

Reducing the interest rate from $12\%$ to $10\%.$

Sheridan pays interest at the end of each year. On January $1,2029,$ Sheridan Company pays $$2,600,000$ in cash to American Bank.

$($a$)$

Your answer is correct.

Will the gain recorded by Sheridan be equal to the loss recorded by American Bank under the debt restructuring?

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Attempts: $2$ of $5$ used

$($b$)$

Your answer is correct.

Can Sheridan Company record a gain under the term modification mentioned above?

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$($c$)$

Your answer is partially correct.

Assuming that the interest rate Sheridan should use to compute interest expense in future periods is $1\mathrm{.}4276\%,$ prepare the interest payment schedule of the note for Sheridan Company after the debt restructuring. $($Round answers to $0$ decimal places, es$.38,548)$

$\backslash$table$[[$SHERIDAN COMPANY Interest Payment Schedule After Debt Restructuring Effective$-$Interest Rate$],[,$Cash Paid$],[$$$,\backslash$table$[[$