On October $1$st$,2022,$ Payne Windows modified the terms of an outstanding notes payable with Fratelli Financing, Inc. The note was originally a one$-$year note that was due on October $1$st$,2022.$ Under the terms of this debt restructuring, Fratelli Financing agreed to lower the amount of principal outstanding on the note, decrease the note's interest rate, and extended the life of the note until October $1$st$,2025.$ Under these restructured terms, Payne Windows will have to make quarterly interest payments to Fratelli with the first payment due on December $31$st$,2022.$ The repayment of the modified principal balance is due on the last day of the note's extended life, October $1$st$,2025.$ Specific information about the note is as follows:

Previous principal balance $$100,000$

Modified principal balance $88,000$

Previous interest rate $6\%$

Modified interest rate $4\mathrm{.}1\%$

Revised remaining life of note $($years$)3$

Requirement One:

Determine the expected future cash outflows on this note.

Modified principal balance

Times: modifed interest rate

Annual interest payment

Times: revised life of note $($years$)$

Total interest paid on note

Plus: modified principal balance

Total future cash outflows

Requirement Two:

Determine the amount of gain that the Payne will record on this debt restructuring.

Previous principal balance

Less: total future cash outflows

Gain on debt restructure

Requirement Three:

Record the October $1$st journal entry to account for the the restructuring of Payne's outstanding debt to Fratelli Financing.

Requirement Four:

Record the December $31$st journal entry to account for the first quarterly payment of interest to Fratelli Financing, Inc.