19. On December 31, 2012, Guimary Corporation is experiencing extreme financial pressure and is in default in meeting interest payment in its long-term note of P6,000,000 due on December 31, 2013. The interest rate is 10% payable every December 31. In an agreement with the creditor, Guimary Corporation obtained the changes in the terms of the note as shown in the image. At the time of restructuring, the stated rate of interest of the original obligation prevailed in the market for similar notes. What is Guimary Corporation's gain on debt restructuring? * The accrued interest of P600,000 on December 31, 2012 is forgiven. • The principal is reduced by P1,000,000. • The new interest rate is 12%. • The new date of maturity is December 31, 2017. a. P1,979,180 b. P1,600,000 c. P1,221,020 d. PO
19. On December 31, 2012, Guimary Corporation is experiencing extreme financial pressure and is in default in meeting interest payment in its long-term note of P6,000,000 due on December 31, 2013. The interest rate is 10% payable every December 31. In an agreement with the creditor, Guimary Corporation obtained the changes in the terms of the note as shown in the image. At the time of restructuring, the stated rate of interest of the original obligation prevailed in the market for similar notes. What is Guimary Corporation's gain on debt restructuring? * The accrued interest of P600,000 on December 31, 2012 is forgiven. • The principal is reduced by P1,000,000. • The new interest rate is 12%. • The new date of maturity is December 31, 2017. a. P1,979,180 b. P1,600,000 c. P1,221,020 d. PO
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![19. On December 31, 2012,
Guimary Corporation is
experiencing extreme financial
pressure and is in default in
meeting interest payment in its
long-term note of P6,000,0O00
due on December 31, 2013. The
interest rate is 10% payable
every December 31. In an
agreement with the creditor,
Guimary Corporation obtained
the changes in the terms of the
note as shown in the image. At
the time of restructuring, the
stated rate of interest of the
original obligation prevailed in
the market for similar notes.
What is Guimary Corporation's
gain on debt restructuring? *
The accrued interest of P600,000 on December 31, 2012 is forgiven.
The principal is reduced by P1,000,000.
The new interest rate is 12%.
The new date of maturity is December 31, 2017.
a. P1,979,180
b. P1,600,000
c. P1,221,020
d. PO](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F36bf3156-a5fe-44a8-8c5b-107dfe27e01c%2F17b04731-6978-42ce-b52e-0f50b9e89f01%2Fpb8izsr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:19. On December 31, 2012,
Guimary Corporation is
experiencing extreme financial
pressure and is in default in
meeting interest payment in its
long-term note of P6,000,0O00
due on December 31, 2013. The
interest rate is 10% payable
every December 31. In an
agreement with the creditor,
Guimary Corporation obtained
the changes in the terms of the
note as shown in the image. At
the time of restructuring, the
stated rate of interest of the
original obligation prevailed in
the market for similar notes.
What is Guimary Corporation's
gain on debt restructuring? *
The accrued interest of P600,000 on December 31, 2012 is forgiven.
The principal is reduced by P1,000,000.
The new interest rate is 12%.
The new date of maturity is December 31, 2017.
a. P1,979,180
b. P1,600,000
c. P1,221,020
d. PO
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