Gottlieb Co. owes $199,800 to Ceballos Inc. The debt is a 10-year, 11% note. Because Gottlieb Co. is in financial trouble, Ceballos Inc. agrees to accept some land and cancel the entire debt. The property has a book value of $90,000 and a fair value of $140,000. Instructions a. Prepare the journal entry on Gottlieb's books for debt restructure. b. Prepare the journal entry on Ceballos's books for debt restructure.
Gottlieb Co. owes $199,800 to Ceballos Inc. The debt is a 10-year, 11% note. Because Gottlieb Co. is in financial trouble, Ceballos Inc. agrees to accept some land and cancel the entire debt. The property has a book value of $90,000 and a fair value of $140,000. Instructions a. Prepare the journal entry on Gottlieb's books for debt restructure. b. Prepare the journal entry on Ceballos's books for debt restructure.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 15RE: On January 1, Kilgore Inc. accepts a 20,000 non-interest-bearing, 5-year note from Dieland Company...
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Gottlieb Co. owes $199,800 to Ceballos Inc. The debt is a 10-year, 11% note. Because Gottlieb Co. is in financial trouble, Ceballos Inc. agrees to accept some land and cancel the entire debt. The property has a book value of $90,000 and a fair value of $140,000.
Instructions
a. Prepare the
b. Prepare the journal entry on Ceballos's books for debt restructure.
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