On December 31, 2019, GMC had a note payable with a book value of $100,000. GMC has faced economic difficulties that have not allowed it to meet the payment of this debt. Suppose that on the above date the bank agreed to change the terms of the loan as follows: the principal (maturity value) was reduced to $80,000, the maturity date was changed to December 31, 2021, and the contractual interest rate was changed. reduced from 15% to 10%. Determine the effect of this restructuring of debt on GMC's Net Income on 12/31/19. a. GMC is going to report a profit of $20,000. b. GMC will report a profit equal to 5% of the principal. c. GMC is going to report a profit of $4,000. d. When the terms of the contract are adjusted, the debtor does NOT report earnings.

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