Due to adverse economic circumstances and poor management, Bontoc Company has negotiated a restructuring of P8,500,000 note payable to Second Bank. The bank has agreed to reduce the face amount of the note from P8,500,000 to P8,000,000, reduce the interest rate from 14% to 10%, and extend the due date one year from date of restructuring. The restructuring was done at the beginning of the current year: There is no unpaid interest on the restructured note at this time. The present value of 1 at 14% for one period is 0.8772 and the present value of an ordinary of 1 for two periods at 14% is 1.6467. Required: Cs Scannedwith Gamarahe current year. 11epare journal
Due to adverse economic circumstances and poor management, Bontoc Company has negotiated a restructuring of P8,500,000 note payable to Second Bank. The bank has agreed to reduce the face amount of the note from P8,500,000 to P8,000,000, reduce the interest rate from 14% to 10%, and extend the due date one year from date of restructuring. The restructuring was done at the beginning of the current year: There is no unpaid interest on the restructured note at this time. The present value of 1 at 14% for one period is 0.8772 and the present value of an ordinary of 1 for two periods at 14% is 1.6467. Required: Cs Scannedwith Gamarahe current year. 11epare journal
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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