On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only interest had been paid to date. Due to its financial difficulties has negotiated a restructuring of its notes payable. The parties agree that LoL would settle the debt on the following terms: • Settle one half of the note by transferring land with a recorded value of P800,000, and a fair value of P900,000. • Settle one fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair value of P1.80 per share. Modify the terms of the remaining one fourth of the note by reducing the interest to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000. Total gains on the settlement of debt to be recognized in profit or loss is: A.P437,306 B.P577,306 C.P337,306 D.PO E.P340,000

On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only interest had been paid to date. Due to its financial difficulties has negotiated a restructuring of its notes payable. The parties agree that LoL would settle the debt on the following terms: • Settle one half of the note by transferring land with a recorded value of P800,000, and a fair value of P900,000. • Settle one fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair value of P1.80 per share. Modify the terms of the remaining one fourth of the note by reducing the interest to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000. Total gains on the settlement of debt to be recognized in profit or loss is: A.P437,306 B.P577,306 C.P337,306 D.PO E.P340,000

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 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...

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On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only interest had been paid to date. Due to its financial difficulties LoL has negotiated a restructuring of its notes payable. The parties agree that LoL would settle the debt on the following terms: • Settle one half of the note by transferring land with a recorded value of P800,000, and a fair value of P900,000. • Settle one fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair value of P1.80 per share. • Modify the terms of the remaining one fourth of the note by reducing the interest to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000. Total gains on the settlement of debt to be recognized in profit or loss is: A.P337,306B.P340,000C.P437,306D.P577,306
On December 31, 2021, ABC Co. was indebted to XYZ Street Company on a P2M, 10% note. Only interest had been paid to date. Due to its financial difficulties ABC has negotiated a restructuring of its notes payable. The parties agree that ABC would settle the debt on the following terms: • Settle one half of the note by transferring land with a recorded value of P800,000, and a fair value of P900,000. • Settle one fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair value of P1.80 per share. • Modify the terms of the remaining one fourth of the note by reducing the interest to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000. Total gains on the settlement of debt to be recognized in profit or loss: *
On December 31, 2021, ABC Co. was indebted to XYZ Street Company on a P2M, 10% note. Only interest had been paid to date. Due to its financial difficulties ABC has negotiated a restructuring of its notes payable. The parties agree that ABC would settle the debt on the following terms:• Settle one half of the note by transferring land with a recorded value of P800,000, and a fair value of P900,000.• Settle one fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair value of P1.80 per share.• Modify the terms of the remaining one fourth of the note by reducing the interest to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000.Total gains on the settlement of debt to be recognized in profit or loss: P0 P577,306 P340,000 P437,306 P337,306
On December 31, 2021, ABC Co. was indebted to XYZ Street Company on a P2M, 10% note. Only interest had been paid to date. Due to its financial difficulties ABC has negotiated a restructuring of its notes payable. The parties agree that ABC would settle the debt on the following terms:• Settle one half of the note by transferring land with a recorded value of P800,000, and a fair value of P900,000.• Settle one fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair value of P1.80 per share.• Modify the terms of the remaining one fourth of the note by reducing the interest to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000. Total gains on the settlement of debt to be recognized in profit or loss: A. P437,306 B. P0 C. P577,306 D. P337,306 E. P340,000
On December 31, 2010 a company was indebted to Creditor Co. on a P2,000,000 10% note. Only interest had been paid to date. Due to its financial difficulties, the company has negotiated a restructuring of its note payable. The parties agreed that the company would settle the debt on the following terms: settle 1/2 of the note by transferring land with a recorded value of P800,000 and a fair value of P900,000 • settle 1/4 of the note by transferring 200,000 shares of P1 par ordinary shares with a fair market value of P15 per share modify the terms of the remaining 1/4 of the note by reducing the interest rate to 5%, extend the due date 3 years from the date of restructuring and reducing the principal to P300,000. How much was the (1) total gain on extinguishment of debt and (2) carrying amount of the note payable as of December 31, 2021? O P437,306 and P273,963 O P550,006 and P142,494 O P336.306 and P262,694 O P437,306 and P262.694
On December 31, 2010, EEEE Company was indebted to AFE Company on a P2,000,000, 10% note. Only interest had been paid to date. Due to its financial difficulties, EEEE Company has negotiated a restructuring of its note payable. The parties agreed that EEEE Company would settle the debt on the following terms: Settle one-half of the note by transferring land with a recorded value of P800,000 and a fair value of P900,000. Settle one-fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair market value of P15 per share. Modify the terms of the remaining one-fourth of the note by reducing the interest rate to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000. 1. What is the carrying amount of the note payable as of December 31, 2011? Choices: 142,494 300,000 273,963 262,694 2. What is the total gain on extinguishment of debt? Choices: 550,006 337,306 -0- 437,306 3. What is the gain on extinguishment of…
On January 1, 2021, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 9%. What amount from the carrying value of the notes shall be presented as part of the non-current liabilities as of December 31,2023?
On January 1, 2021, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 9%.What should be the balance of the Discount on Notes Payable account on the books of ABC Company at December 31, 2022 after adjusting entries are made assuming that the effective interest method is used?
On Jan. 1, 2021, Yumi Co. settled a P 1,000,000 loan payable with an unamortized discount of P 20,000 and accrued interest of P 90,000 by transferring to the lender old equipment with cost of P 3,000,000, accumulated depreciation of P 2,200,000 and fair value of P 900,000. How much gain on extinguishment of debt is to be recognized? a. P 270,000b. P 290,000c. P 250,000d. P 150,000
On December 31, 2021, Empoy Company has overdue notes payable of P5,000,000 with accrued interest of P500,000. The company is threatened with a court suit if it would not settle its debt. The company entered into an agreement with the creditor to transfer real estate carried in the books of Empoy at P3million. The real estate has a current fair market value of P4.5million. What was the total amount of gain reported by Empoy as a result of debt restructuring/ a.) 2,500,000 b.) 1,500,000 c.) 1,000,000 d.) 500,000
On December 31, 2021, Empoy Company has overdue notes payable of P5,000,000 with accrued interest of P500,000. The company is threatened with a court suit if it would not settle its debt. The company entered into an agreement with the creditor to transfer real estate carried in the books of Empoy at P3million. The real estate has a current fair market value of P4.5million. What was the total amount of gain reported by Empoy as a result of debt restructuring? 2,500,000 1,500,000 1,000,000 500,000
On January 1, 2020, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2020. The prevailing rate of interest for a note of this type is 9%.What should be the balance of the Discount on Notes Payable account on the books of DEF at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? A. 0 B. 444,139.49 C.187,482.13 D. 304,112.05