During 2021, tesa Company experienced financial difficulties and is likely to default on a P5,000,000, 15% three year note dated January 1, 2019 payable to Bank of the Pasa Island. On December 31, 2021, the bank agreed to settle the note and unpaid interest of P750,000 for P4,100,000 cash payable on January 31, 2022. . What amount should be reported as gain from extinguishment of debt in 2021 balance sheet?
During 2021, tesa Company experienced financial difficulties and is likely to default on a P5,000,000, 15% three year note dated January 1, 2019 payable to Bank of the Pasa Island. On December 31, 2021, the bank agreed to settle the note and unpaid interest of P750,000 for P4,100,000 cash payable on January 31, 2022. . What amount should be reported as gain from extinguishment of debt in 2021 balance sheet?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 2021, tesa Company experienced financial difficulties and is likely to default on a
P5,000,000, 15% three year note dated January 1, 2019 payable to Bank of the Pasa Island. On
December 31, 2021, the bank agreed to settle the note and unpaid interest of P750,000 for
P4,100,000 cash payable on January 31, 2022.
. What amount should be reported as gain from extinguishment of debt in 2021
sheet?
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