Prepare the journal entries on flint trust books on december

Reference no: EM132480842

Point 1: Teal Corp. owes $295,000 to Flint Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Teal Corp. is in financial trouble, Flint Trust agrees to extend the maturity date to December 31, 2022, reduce the principal to $240,000, and reduce the interest rate to 5%, payable annually on December 31.

Question (a) Prepare the journal entries on Teal's books on December 31, 2020, 2021, 2022.

Question (b) Prepare the journal entries on Flint Trust's books on December 31, 2020, 2021, 2022.

Reference no: EM132480842

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