On December 31, 2020, American Bank enters into a debt restructuring agreement with Barkley Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $3,000,000 note receivable by the following modifications: 1. Reducing the principal obligation from $3,000,000 to $2,400,000.
2. Extending the maturity date from December 31, 2020, to January 1, 2024.
3. Reducing the interest rate from 12% to 10%.

Barkley pays interest at the end of each year. On January 1, 2024, Barkley Company pays $2,400,000 in cash to American Bank.

Required:
a. WIll the fain be recorded by Barkely be equal to the loss recorded by American Bank under the debt restructuring?
b. Cam Barkely Co. record a gain under the term modification mentioned above? Why?
c. Assuming that the interest rate Barkley should use to compute the interest expense in future period in 1.4276% prepare the interest payment schedule of the not for Barkley Co. after the debt restructuring?