Debt B—Assume the same original note as in the above Debt A. The debtor began to experience financial difficulties as evidenced by a downgraded credit rating, serious concern regarding the ability to...

Debt B—Assume the same original note as in the above Debt A. The debtor began to experience financial difficulties as evidenced by a downgraded credit rating, serious concern regarding the ability to continue as a going concern, and an inability to service existing debt. After making two quarterly interest payments, the debtor was unable to make the next interest payment. After failing to make the payment, the note was modified as follows: the principal amount of the note was reduced to $2,500,000, only $30,000 of unpaid interest was to be paid at maturity, and the interest rate was reduced to 4%.