At January 1, 2024, Rothschild Chair Company, Incorporated, was indebted to First Lincoln Bankunder a $35 million, 12% unsecured note. The note was signed January 1, 2021, and was dueDecember 31, 2027. Annual interest was last paid on December 31, 2022. Rothschild ChairCompany was experiencing severe financial difficulties and negotiated a restructuring of theterms of the debt agreement.Required:Prepare all journal entries by Rothschild Chair Company, Incorporated, to record the restructuringand any remaining transactions relating to the debt under each of the independent circumstancesbelow:1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $31million but carried on Rothschild Chair Company's books at $26.5 million.2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce theremaining four interest payments to $1 million each, and (c) reduce the principal to $28.5million.3. First Lincoln Bank agreed to defer all payments (including accrued interest) until the maturitydate and accept $47,648,000 at that time in settlement of the debt.Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVADof $1 and PVAD of $1)Complete this question by entering your answers in the tabs below.Required 1Required 2 Required 3First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $31 million butCompany's books at $26.5 million.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first accomillions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).View transaction list

Debt agreement:A legally enforceable agreement between a debtor and their creditors to pay off…

Answered: At January 1, 2024, Rothschild Chair…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ivanhoe Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of $732,000, an amortized cost of $732,000, and a fair value of $648,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Your answer is partially correct. Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. Credit account titles are automatically indented when 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.) Account Titles and Explanation Debit Credit Loss on Impairment Debt Investments
Tamarisk Corporation has municipal bonds classified as a held-to-maturity at December 31, 2025. These bonds have a par value of $791,000, an amortized cost of $791,000, and a fair value of $709,000. The company believes that impairment accounting is now appropriate for these bonds. (a) Prepare the journal entry to recognize the impairment. (List debit entry before credit entry. Credit account titles are automatically indented when 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.) (b) Account Titles and Explanation eTextbook and Media List of Accounts Save for Later What is the new carrying value of the municipal bonds? New carrying value $ (c) Yes Given that the maturity value of the bonds is $791,000, should Tamarisk Corporation amortize the difference between the carrying amount and the maturity value over the life of the bonds? eTextbook and Media List of Accounts Save for Later Debit Account…
On May 1, 2020, Larkspur Company issued 1,900 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 97, but the fair value of the warrants cannot be determined.(a) Prepare the entry to record the issuance of the bonds and warrants. (Credit account titles are automatically indented when 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.) Account Titles and Explanation Debit Credit (b) Assume the same facts as part (a), except that the warrants had a fair value of $35. Prepare the entry to record the issuance of the bonds and warrants. (Credit account titles are automatically indented when 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. Round intermediate calculations to 5…
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On January 1, 2025, Tamarisk Corporation redeemed $460,000 of bands at 98. At the time of redemption, the unamortized premium was $13,800. Prepare the corporation's journal entry to record the reacquisition of the bonds. (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 the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
Rothschild Chair Company, Incorporated, was indebted to First Lincoln Bank under a $40 million, 10% unsecured note. The note was signed January 1, 2014, and was due December 31, 2027. Annual interest was last paid on December 31, 2022. At January 1, 2024, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. Note: Use appropriate factor(s) from the tables provided. (FV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $.1) Required: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $36 million but carried on Rothschild Chair Company's books at $33 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b)…
Pharoah Company issued $500,000 of bonds on January 1, 2020. (a) Prepare the journal entry to record the redemption of the bonds at maturity, assuming the bonds were issued at 100. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit

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