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Hull Company is indebted to Apex Company under a P5,000,000, 12%, three-year note dated December 21,2018. Because of financial difficulties developing in 2020. Hull Company owed accrued interest of P600,000 on the note on December 31, 2020. Under a debt restructuring on December 31, 2020, Apex Company agreed to settle the note and accrued interest for a tract of land having a fair value of P4,500,000. The acquisition cost of the lqnd is P3,600,000. 1. What amount of pretax gain on extinguishment shoul Hull Company report as component of income from continuing operations in 2020? A. 2,000,000 B. 1,400,000 C. 1,100,000 D. 900,000

Hull Company is indebted to Apex Company under a P5,000,000, 12%, three-year note dated December 21,2018. Because of financial difficulties developing in 2020. Hull Company owed accrued interest of P600,000 on the note on December 31, 2020. Under a debt restructuring on December 31, 2020, Apex Company agreed to settle the note and accrued interest for a tract of land having a fair value of P4,500,000. The acquisition cost of the lqnd is P3,600,000. 1. What amount of pretax gain on extinguishment shoul Hull Company report as component of income from continuing operations in 2020? A. 2,000,000 B. 1,400,000 C. 1,100,000 D. 900,000

FINANCIAL ACCOUNTING
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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Problem 9-13

Hull Company is indebted to Apex Company under a P5,000,000, 12%, three-year note dated December 21,2018.

Because of financial difficulties developing in 2020. Hull Company owed accrued interest of P600,000 on the note on December 31, 2020.

Under a debt restructuring on December 31, 2020, Apex Company agreed to settle the note and accrued interest for a tract of land having a fair value of P4,500,000. The acquisition cost of the lqnd is P3,600,000.

1. What amount of pretax gain on extinguishment shoul Hull Company report as component of income from continuing operations in 2020?

A. 2,000,000

B. 1,400,000

C. 1,100,000

D. 900,000

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