At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $12 million under a 10% note due December 31, 2023. Interest was paid last on December 31, 2019. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to: a. Forgive the interest accrued for the year just ended.
b. Reduce the remaining two years’ interest payments to $1 million each and delay the first payment until December 31, 2022.
c. Reduce the unpaid principal amount to $11 million.
Required: Prepare the journal entries by Brainard Industries, Inc., necessitated by the restructuring of the debt at (1) January 1, 2021; (2) December 31, 2022; and (3) December 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

a. Forgive the interest accrued for the year just ended (2020)

January 1, 2021, unpaid interest is forgiven by bank

Dr Interest payable 1,200,000

    Cr Gain on troubled debt restructuring 1,200,000

b. Reduce the remaining two years’ interest payments to $1 million each and delay the first payment until December 31, 2022.

Even though the interest payments decrease from $11,000,000 x 10% = $1,100,000 to $1,000,000 (which results in $100,000 savings per year), no journal entry is necessary to record these savings.

But we must record accrued interests and their payment:

December 31, 2021, accrued interests on restructured bank loan

Dr Interest expense 1,000,000

    Cr Interest payable 1,000,000

December 31, 2022, interests paid to the bank

Dr Interest payable 1,000,000

Dr Interest expense 1,000,000

    Cr Cash 2,000,000

December 31, 2023, note payable plus interests repaid to the bank

Dr Notes payable 11,000,000

Dr Interest expense 1,100,000

    Cr Cash 12,100,000

Since the interest charged by the bank was reduced to $1 million for two years, it covered interest expense from 2021 and 2022, therefore, the interest charged during 2023 should be the normal interest rate = $11,000,000 x 10% = $1,100,000

c. Reduce the unpaid principal amount to $11 million.

January 1, 2021, unpaid principal amount reduced by $1 million

Dr Notes payable 1,000,000

    Cr Gain on troubled debt restructuring 1,000,000

sound is invisible, but sometimes we can feel it. when a kettle-drum is thumped with a stick that time the tight drum skin moving up and down very quickly for some time and then it pumped sound waves into the air. loudspeakers also work in a similar manner.

components of a speaker:

electromagnet

in order to translate an electrical signal into an audible sound, an electromagnet is used in looudspeakers

  suspension

suspension is used to   center the voice coil in the gap of the magnet and it exerts a restoring force to keep it there. suspension is used to limits the maximum mechanical excursion of the diaphragm and voice coil.

voice coil

voice coil is a coil of wire which is attached to the apex of a loudspeaker cone. it provides the motive force to the cone by the reaction of a magnetic field to the current passing through it.

cone

in a   loudspeaker, a   thin, semi-rigid membrane attached to the voice coil, which moves in a magnetic gap due to which it vibrates   and produced sound. it is known as diaphragm and it can also be called a cone, though not all speaker diaphragms are cone-shaped.

surround

surround is also known as front suspension. surround is used to join the cone to the chassis. together with the suspension it controls the cone excursion, and it is also used to   determine how energy which is   travelling through the cone is absorbed, and how the speaker limits when it reaches the ends of its travel.

dustcap

dustcap is used to protect the voice coil from dust and dirt. it is a part of the cone.

how speaker work

the outer part of the cone is fastened to the outer part of the loudspeaker's circular metal rim. the inner part is fixed to   voice coil that sits just in front of a permanent magnet . when loudspeaker is hooked up to a stereo, electrical signals feed through the speaker cables into the coil. it will convert the coil into an electromagnet magnet . when electricity flows back and forth in the cables, the electromagnet either repels or attract the permanent magnet. this moves the coil back and forth, and it pull and push the loudspeaker cone. like a drum skin vibrating back and forth, the moving cone pumps sounds out into the air.in this way loudspeakers works.

u = 30

continuing your method

= +

subtract from both sides

= - thus

= -

= ⇒ u = 30