Quito, Inc., which owes Ecuador Company $1.200.000 in notes payabie. is in inuncial dilficultyTo eliminate the debt. Ecuador agrees to accept from Quino land having a fair markat value of$810,000 and a recorded cost of S620,000.Using the attached form, compute the amount of gain or loss to Quite. Inc.on the transfer (disposition) of the land.Using the attached form, compute the amount of gain or hess to Quits, Inc.on the settlement of the debt.Using the attached form, prepare the jeurnal enry on Quito's books o recondthe settlement of this debt. Omit explanation.Using the attached form, compute the gain or loss to Ecuader Company bromsettlement of its receivable from QuitoUsing the attached form, prepare the journal entry on Ecusdor's books tnrecord the settlement of this receivable. Omit explanationREQUIRED: (1)(2)(3)(4)(5)

In this question, we have 5 requirements 1- We have to compute gain or loss for Quito Inc on the…

Quito, Inc., which owes Ecuador Company $1.200.000 in notes payable. is in linancial dificulty To eliminate the debt, Ecuador agrees to accept from Quito land having a fair market value of $810,000 and a recorded cost of $620,000.

Quito, Inc., which owes Ecuador Company $1.200.000 in notes payable. is in linancial dificulty To eliminate the debt, Ecuador agrees to accept from Quito land having a fair market value of $810,000 and a recorded cost of $620,000.

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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Question

Quito, Inc., which owes Ecuador Company $1.200.000 in notes payabie. is in inuncial dilficulty
To eliminate the debt. Ecuador agrees to accept from Quino land having a fair markat value of
$810,000 and a recorded cost of S620,000.
Using the attached form, compute the amount of gain or loss to Quite. Inc.
on the transfer (disposition) of the land.
Using the attached form, compute the amount of gain or hess to Quits, Inc.
on the settlement of the debt.
Using the attached form, prepare the jeurnal enry on Quito's books o recond
the settlement of this debt. Omit explanation.
Using the attached form, compute the gain or loss to Ecuader Company brom
settlement of its receivable from Quito
Using the attached form, prepare the journal entry on Ecusdor's books tn
record the settlement of this receivable. Omit explanation
REQUIRED: (1)
(2)
(3)
(4)
(5)

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