How do record journal entries relating to note receivable

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Periscope Port Authority has had a? long-term relationship with the nearby lumber? company, which ships a significant amount of lumber through the port. To help finance the lumber? company's operations, Periscope advanced $10 million to the lumber company in return for a promissory note that specified payment of the $10 million plus interest at 6% ?annually, due at the end of two years.? However, due to adverse conditions in the lumber? industry, the lumber company was unable to meet its obligation and pay Periscope at the end of two years. In light of the importance of the relationship between Periscope and the lumber? company, Periscope extended the due date by three years? (after the original two? years) but increased the repayment amount to $13 ?million, inclusive of interest. The market interest rate for the loan remained at 6%.

Required

Problem 1: Record the journal entries relating to the note receivable from the date of issuance to the restructuring? date, inclusive.

Reference no: EM132707867

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