On January 1, 2017, the Gray Corporation is delinquent on a P300,000 note to the National Bank on which P72,000 of interest has accrued. On January 2, 2017, Gray enters into a debt restructuring agreement with the bank. Prepare the journal entries for Gray to record the restructuring agreement assuming: a. The bank accepts P10,000 shares of Gray's 10 par ordinary share that is currently selling for 35 per share in full settlement of the debt. b. The bank accepts land with a fair value of P342,000 in full settlement of the debt. The land is being carried on Gray's books at original cost of P500,000 with accumulated depreciation of P176,000.

On January 1, 2017, the Gray Corporation is delinquent on a P300,000 note to the National Bank on which P72,000 of interest has accrued. On January 2, 2017, Gray enters into a debt restructuring agreement with the bank. Prepare the journal entries for Gray to record the restructuring agreement assuming: a. The bank accepts P10,000 shares of Gray's 10 par ordinary share that is currently selling for 35 per share in full settlement of the debt. b. The bank accepts land with a fair value of P342,000 in full settlement of the debt. The land is being carried on Gray's books at original cost of P500,000 with accumulated depreciation of P176,000.

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

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 29E

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