I want solve for part B(a)Your answer is correct.Waterway Stores owes €205,400 to Ceballos SpA. The debt is a 10-year, 11% note. Because Waterway is in financial trouble.Ceballos agrees to accept some land and cancel the entire debt. The land has a book value of €87,000 and a fair value of €140,000.Prepare the journal entry on Waterway's books for debt settlement. (Credit account titles are automatically indented when theamount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)Account Titles and ExplanationNotes Payable(b)LandGain on Disposition of LandGain on Extinguishment of DebtDateDecember31, 2022December31, 2023December31, 2024DebitAccount Titles and Explanation205400Wildhorse Corp. owes $293,000 to First Trust. The debt is a 10-year, 12% note due December 31, 2022. Because Wildhorse Corp.is in financial trouble, First Trust agrees to extend the maturity date to December 31, 2024, reduce the principal to $226,000, andreduce the interest rate to 5%, payable annually on December 31. Wildhorse's market rate of interest is 8%. Prepare the journalentries on Wildhorse's books on December 31, 2022, 2023, and 2024. Remove the old note at face value and record the new notein the same journal entry. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answersto O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If noentry is required, select "No Entry" for the account titles and enter O for the amounts.)CreditDebit870005300065400Credit

Lets understand the basics. When financial difficulty arise in the hand of borrower then lander…

Answered: Date December 31, 2022 Account Titles…

Business

Accounting

Date December 31, 2022 Account Titles and Explanation Debit Credit

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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Question

I want solve for part B
(a)
Your answer is correct.
Waterway Stores owes €205,400 to Ceballos SpA. The debt is a 10-year, 11% note. Because Waterway is in financial trouble.
Ceballos agrees to accept some land and cancel the entire debt. The land has a book value of €87,000 and a fair value of €140,000.
Prepare the journal entry on Waterway's books for debt settlement. (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 O for the amounts.)
Account Titles and Explanation
Notes Payable
(b)
Land
Gain on Disposition of Land
Gain on Extinguishment of Debt
Date
December
31, 2022
December
31, 2023
December
31, 2024
Debit
Account Titles and Explanation
205400
Wildhorse Corp. owes $293,000 to First Trust. The debt is a 10-year, 12% note due December 31, 2022. Because Wildhorse Corp.
is in financial trouble, First Trust agrees to extend the maturity date to December 31, 2024, reduce the principal to $226,000, and
reduce the interest rate to 5%, payable annually on December 31. Wildhorse's market rate of interest is 8%. Prepare the journal
entries on Wildhorse's books on December 31, 2022, 2023, and 2024. Remove the old note at face value and record the new note
in the same journal entry. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers
to O decimal places, e.g. 5,275. 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 O for the amounts.)
Credit
Debit
87000
53000
65400
Credit

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