[cha]

Please help me with this one because I have trouble answering it

On December 31, 2020, Camry Company entered into a debt restructuring agreement with High Company, which was experiencing financial difficulties. Camry restructured a $100,000 note receivable as follows:

• Reduced the principal obligation to $70,000.

• Forgave $12,000 of accrued interest.

• Extended the maturity date from December 31, 2020 to December 31, 2022.

• Reduced the interest rate from 12% to 8%. Interest was payable annually on December 31, 2021 and 2022.

Present value factors

Single sum, 2 years @ 8% .85734

Single sum, 2 years @ 12% .79719

Ordinary annuity 2 years @ 8% 1.78326

Ordinary annuity 2 years @ 12% 1.69006

What is the impairment loss on the note receivable for 2021? and what should be the entries to record the debt restructuring on the books of the debtor and the creditor?

Your help will be much appreciated

xx, Cha