The following account balances are available from the ledger of Yutao Shui Corporation on December 31, 2019:Common Shares (22,000 shares authorized and outstanding) $ 1,144,000Retained Earnings (Deficit)(190,000)On January 2, 2020, the corporation put into effect a shareholder-approved reorganization by agreeing to pass the common sharesover to the creditors in full payment of the $240,000 Notes Payable, writing up Buildings by $128,300, and eliminating the deficit.Assume that Yutao Shui follows ASPE.Prepare the required journal entries for the financial reorganization of Yutao Shui Corporation. (Credit account titles are automaticallyindented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for theamounts)Account Titles and Explanation(To record the elimination of the deficit against share capital)(To record write-up of buildings to fair value andrecord the negotiated change in control)DebitCredit

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Prepare the required journal entries for the financial reorganization of Yutao Shui Corporation. ( cu

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

The following account balances are available from the ledger of Yutao Shui Corporation on December 31, 2019:
Common Shares (22,000 shares authorized and outstanding) $ 1,144,000
Retained Earnings (Deficit)
(190,000)
On January 2, 2020, the corporation put into effect a shareholder-approved reorganization by agreeing to pass the common shares
over to the creditors in full payment of the $240,000 Notes Payable, writing up Buildings by $128,300, and eliminating the deficit.
Assume that Yutao Shui follows ASPE.
Prepare the required journal entries for the financial reorganization of Yutao Shui Corporation. (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 for the
amounts)
Account Titles and Explanation
(To record the elimination of the deficit against share capital)
(To record write-up of buildings to fair value and
record the negotiated change in control)
Debit
Credit

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