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Record any restructuring of the loan on the books

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Question - Frankfurt Company has a 5 year $1,000,000, 5% note payable to Deutsches Bank International. The note was issued at par and interest was paid regularly. On January 1, 2015, the date the note came due, Frankfurt notified the bank that they could not make the $1,000,000 payment. A restructuring deal was struck. The interest rate was reduced to 3% and the note extended to January 1, 2018 when $900,000 will be paid to complete the loan. The fair value of money is still 5%.

a. Record any restructuring of the loan on the books of Frankfurt Company.

b. Record the restructured loan on the books of Deutsches Bank International.

Reference no: EM131643655

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