The Bellefonte Company is delinquent on a $100,000, 12% note plus $20,000 accrued interest to the Hollywood National Bank. The note was due on June 1, 2016. On June 2, 2016, the bank agrees to restructure the debt by forgiving the accrued interest, reducing the face value of the note to $90,000, reducing the interest rate to 7%, and extending the maturity date to June 1, 2019. The interest is due each year on June 1.
Required:
Prepare the journal entries for Bellefonte Company to record the restructuring on June 2, 2016, and the payment of interest on June 1, 2017.

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The Answer of The Bellefonte Company is delinquent on a $100,000, 12% note plus $20,000 accrued interest to the Hollywood National Bank. The note was due on June 1, 2016. On June 2, 2016, the bank agrees to restructure the debt by forgiving the accrued interest, reducing the face value of the note to $90,000, reducing the interest rate to 7%, and extending the maturity date to June 1, 2019. The interest is due each year on June 1.
Required:
Prepare the journal entries for Bellefonte Company to record the restructuring on June 2, 2016, and the payment of interest on June 1, 2017.

The Bellefonte Company Is Delinquent on a $100,000, 12% Note