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only 10 cents on the dollar. In 2020, settlement is made, and Michael receives only $300. How much, if any, is Michael able to deduct in 2019 and how much in 2020?

only 10 cents on the dollar. In 2020, settlement is made, and Michael receives only $300. How much, if any, is Michael able to deduct in 2019 and how much in 2020?

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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Question 1 Jasmine's business has run into financial problems and Jasmine contacted Michael for some assistance, As a result, in 2018, Michael loaned $5,000 to Jasmine. She signed all relevant documentation regarding the loan and agreed to repay the loan in 2 years. Unfortunately shortly after, Jasmine filed for personal bankruptcy in 2019 and this debt is a business debt. At that time, Michael learned that unsecured creditors, including himself were ultimately expected to receive only 10 cents on the dollar. In 2020, settlement is made, and Michael receives only $300. How much, if any, is Michael able to deduct in 2019 and how much in 2020? $4,500; $300 $4,900; $200 $5,000; $300 $4,500; $200 $4,700; $500
Transcribed Image Text:Question 1 Jasmine's business has run into financial problems and Jasmine contacted Michael for some assistance, As a result, in 2018, Michael loaned $5,000 to Jasmine. She signed all relevant documentation regarding the loan and agreed to repay the loan in 2 years. Unfortunately shortly after, Jasmine filed for personal bankruptcy in 2019 and this debt is a business debt. At that time, Michael learned that unsecured creditors, including himself were ultimately expected to receive only 10 cents on the dollar. In 2020, settlement is made, and Michael receives only $300. How much, if any, is Michael able to deduct in 2019 and how much in 2020? $4,500; $300 $4,900; $200 $5,000; $300 $4,500; $200 $4,700; $500
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