Prepare the journal entries on burnaby books

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Problem - Burnaby Limited owes $400,000 to First Vancouver Bank. On a 10-year, 8% note due on December 31, 2020. The note was issued at par. Because Burnaby is in financial trouble, First Vancouver Bank agrees to extend the maturity date to December 31, 2022, reduce the principal to $350,000, and reduce the interest rate to 4%, payable annually on December 31. The market rate is currently 6%. Burnaby prepares financial statements in accordance with IFRS. Prepare the journal entries on Burnaby's books for December 31, 2020 and December 2021.

Reference no: EM133015666

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