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.

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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