Question: (Term Modification with GainCreditors Entries) Using the same information as in E14-21 and E14-23 above, answer the following questions related to American Bank (creditor). (a)

(Term Modification with Gain—Creditor’s Entries) Using the same information as in E14-21 and E14-23 above, answer the following questions related to American Bank (creditor).

(a) Compute the loss American Bank will suffer under this new term modification. Prepare the journal entry to record the loss on American’s books.

(b) Prepare the interest receipt schedule for American Bank after the debt restructuring.

(d) What entry should American Bank make on January 1, 2014?

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a The loss can be calculated as follows Prerestructuring carrying amount of note Less Present value ... View full answer

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