The UMET Company is delinquent on a $600,000, 16% note plus $64,000 accrued interest to the La Jollita Bank. The note was due on April 1, 2016. On April 2, 2016, the La Jollita Bank agrees to restructure the debt by forgiving the accrued interest, reducing the face value of the note to $300,000, reducing the interest rate to 8%, and extending the maturity date to April 1, 2014. The interest is due each year on April 1.
Required: Prepare the journal entries for UMET Company to record the restructuring on April 2, 2016, and the payment of interest on April 1, 2017.