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Daniel Blossom is the sole shareholder of Blossom Inc., which is currently under bankruptcy court protection. As a debtor in possession, he has negotiated a revised loan agreement with United Bank. Blossom Inc.$\text{'}$s $$444,000,10-$year, $8\%$ note issued at par was refinanced with a $$444,000,10-$year, $4\%$ note. Assume the market rate of interest is $8\%$ at the refinancing date. Both Blossom and United Bank prepare financial statements in accordance with IFRS $9.$

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$($b$)$ Prepare the journal entries to record this refinancing $(1)$ on the books of Blossom and $(2)$ on the books of United Bank. Assume for simplicity that United Bank had not previously recognized any impairment, although under the expected loss method it is likely that it would have recognized some loss. $($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answer to $0$ decimal places e$.$g$.58,971.$ Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. List all debit entries before credit entries.$)$

No$.$ Account Titles and Explanation

Debit

Credit

$(1)$

Notes Payable

Notes Payable

Gain on Restructuring of Debt

$(2)$

Modification Gain or Loss

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