On January 1, 2015, Duke Company Negotiated an Agreement to Modify

On January 1, 2015, Duke Company negotiated an agreement to modify the terms of a $500,000 note with $38,000 of accrued interest.Payments of $35,000 including interest will be made each quarter end up to and including June 30, 2019.Which of the following is true about this troubled debt restructuring?

A) ​Interest expense will be recognized as it is incurred.
B) ​A gain of $88,000 will be recognized.
C) ​The present value of the payments must be calculated to determine if there is a gain or loss.
D) ​None of the above is true.