(1) Compute the loss that Flounder Bank will suffer from the debt restracturing (Round answer to 0 decimal places, eg. 38,548.) Loss on restructuring of debt $ O Show Transcribed Text Date Account Titles and Explanation 3 (2) Prepare the journal entry to record the loss. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually) December 31.2020 c Debit Credit
(1) Compute the loss that Flounder Bank will suffer from the debt restracturing (Round answer to 0 decimal places, eg. 38,548.) Loss on restructuring of debt $ O Show Transcribed Text Date Account Titles and Explanation 3 (2) Prepare the journal entry to record the loss. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually) December 31.2020 c Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Please do not give image format
Transcribed Image Text:On December 31, 2020, Flounder 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, $4,500,000 note receivable by the following modifications:
1. Reducing the principal obligation from $4,500,000 to $3,600,000.
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 $3,600,000 in cash to Flounder Bank.
Answer the following questions related to Flounder Bank (creditor).
Transcribed Image Text:(1) Compute the loss that Flounder Bank will suffer from the debt restracturing (Round answer to 0 decimal places, e.g. 38,548.)
Loss on restructuring of debt $
Show Transcribed Text
Ć
(2) Prepare the journal entry to record the loss. (If no entry is required, select "No Entry" for the account titles and enter O for the
amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually)
Date Account Titles and Explanation
December
31.2020
Debit
Credit
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