Youth Company is in financial trouble and could not meet maturing installments and interest on its bank loan of P5,000,000. The accrued interest on the loan on this date is P1,000,000. Youth Company and the bank agreed on a “dacion en pago” arrangement. Thus the mortgaged land and building were
Youth Company is in financial trouble and could not meet maturing installments and interest on its bank loan of P5,000,000. The accrued interest on the loan on this date is P1,000,000. Youth Company and the bank agreed on a “dacion en pago” arrangement. Thus the mortgaged land and building were given by Youth Company as full payment for the loan including accrued interest. The cost of the land is P1,500,000 and the building, P6,000,000 with
1. What amount of gain (loss) on debt restructuring and gain (loss) on exchange respectively, would be recognized by Youth if the US GAAP is applied?
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