Due to extreme financial difficulties, Armada Company has negotiated a restructuring of its 10% P5,000,000 note payable due on December 31, 2021. the unpaid interest on the note on such date is P500,000. the creditor has agreed to reduce the face value to P4,000,000, forgive the unpaid interest, reduce the interest rate to 8% and extend the due date three years from December 31, 2021. Armada Company should report gain on extinguishment of debt in its 2021 income statement at Group of answer choices 1,203,200 1,703,200 540,000 2,000000
Due to extreme financial difficulties, Armada Company has negotiated a restructuring of its 10% P5,000,000 note payable due on December 31, 2021. the unpaid interest on the note on such date is P500,000. the creditor has agreed to reduce the face value to P4,000,000, forgive the unpaid interest, reduce the interest rate to 8% and extend the due date three years from December 31, 2021. Armada Company should report gain on extinguishment of debt in its 2021 income statement at Group of answer choices 1,203,200 1,703,200 540,000 2,000000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Due to extreme financial difficulties, Armada Company has negotiated a restructuring of its 10% P5,000,000 note payable due on December 31, 2021. the unpaid interest on the note on such date is P500,000. the creditor has agreed to reduce the face value to P4,000,000, forgive the unpaid interest, reduce the interest rate to 8% and extend the due date three years from December 31, 2021.
Armada Company should report gain on extinguishment of debt in its 2021 income statement at
Group of answer choices
1,203,200
1,703,200
540,000
2,000000
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