Rothschild Chair Company, Incorporated, was indebted to First Lincoln Bank under a $35 million, 10% unsecured note. The note was signed January 1, 2014, and was due December 31, 2027. Annual interest was last paid on December 31, 2022. At January 1, 2024, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. Note: Use appropriate factor(s) from the tables provided. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $31 million but carried on Rothschild Chair Company's books at $28 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $2.0 million each, and (c) reduce the principal to $30 million. Complete this question by entering your answers in the tabs below. Required 1 Required 2 First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $2 million each, and (c) reduce the principal to $30 million. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate final answer to whole dollars. View transaction list No 2 View journal entry worksheet Date December 31, 2024 General Journal Debit 23,013 Credit Ⓒ Show less
Rothschild Chair Company, Incorporated, was indebted to First Lincoln Bank under a $35 million, 10% unsecured note. The note was signed January 1, 2014, and was due December 31, 2027. Annual interest was last paid on December 31, 2022. At January 1, 2024, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. Note: Use appropriate factor(s) from the tables provided. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $31 million but carried on Rothschild Chair Company's books at $28 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $2.0 million each, and (c) reduce the principal to $30 million. Complete this question by entering your answers in the tabs below. Required 1 Required 2 First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $2 million each, and (c) reduce the principal to $30 million. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate final answer to whole dollars. View transaction list No 2 View journal entry worksheet Date December 31, 2024 General Journal Debit 23,013 Credit Ⓒ Show less
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A-2
![Problem 7-15 (Algo) Troubled debt restructuring [Appendix 7B]
Rothschild Chair Company, Incorporated, was indebted to First Lincoln Bank under a $35 million, 10% unsecured note. The note was
signed January 1, 2014, and was due December 31, 2027. Annual interest was last paid on December 31, 2022. At January 1, 2024,
Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt
agreement.
Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future
years, relating to the debt under each of the independent circumstances below:
1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $31 million but carried on Rothschild Chair
Company's books at $28 million.
2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to
$2.0 million each, and (c) reduce the principal to $30 million.
Complete this question by entering your answers in the tabs below.
Required 1
First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $2 million
each, and (c) reduce the principal to $30 million.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate
and final answer to whole dollars.
Required 2
View transaction list View journal entry worksheet
No
2
Date
December 31,
2024
General Journal
< Required 1
Debit
Required 2 >
23,013
Credit
Show less](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7fddd139-1faf-4606-9d3a-385c707e7e18%2Fa4f0dd7b-132d-4081-a1d6-3d8f23962cb2%2Fgb0t224_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 7-15 (Algo) Troubled debt restructuring [Appendix 7B]
Rothschild Chair Company, Incorporated, was indebted to First Lincoln Bank under a $35 million, 10% unsecured note. The note was
signed January 1, 2014, and was due December 31, 2027. Annual interest was last paid on December 31, 2022. At January 1, 2024,
Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt
agreement.
Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future
years, relating to the debt under each of the independent circumstances below:
1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $31 million but carried on Rothschild Chair
Company's books at $28 million.
2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to
$2.0 million each, and (c) reduce the principal to $30 million.
Complete this question by entering your answers in the tabs below.
Required 1
First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b) reduce the remaining four interest payments to $2 million
each, and (c) reduce the principal to $30 million.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate
and final answer to whole dollars.
Required 2
View transaction list View journal entry worksheet
No
2
Date
December 31,
2024
General Journal
< Required 1
Debit
Required 2 >
23,013
Credit
Show less
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