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what were going to be looking at here is debt restructuring but a modification of terms of a loan here and were going to be looking at it from this perspective of a creditor here really theyre gonna have to calculate a new effective interest rate here and theyre also going to have a loss and were gonna be looking at the interest revenue here on this restructuring of a loan or its gonna be a notes receivable here and for example here on 1231 20 X 1 Bank B enters into a debt restructuring agreement with corporation a which is experiencing financial difficulties here in Bank B restructures a million dollar loan receivable issued at par and the interest is paid today and then noted here is restructured by number one here reducing the principal obligation from $1,000,000 here to $900,000 and the note has four years remaining here in the maturity date here is 1231 20 X 5 and theyre going to be paying Bank B here is going to require corporation a here to continue paying at the interest
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