9th Edition

ISBN: 9781259722660

Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher: McGraw-Hill Education

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Chapter 14, Problem 14.33E

Troubled debt restructuring; debt settled

• Appendix B

At January 1, 2018, Transit Developments owed First City Bank Group $600,000, under an 11% note with three years remaining to maturity. Due to financial difficulties, Transit was unable to pay the previous year’s interest. First City Bank Group agreed to settle Transit’s debt in exchange for land having a fair value of $450,000. Transit purchased the land in 2014 for $325,000.

Required:

Prepare the journal entry(s) to record the restructuring of the debt by Transit Developments.

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Chapter 14, Problem 14.32E

Chapter 14, Problem 14.34E

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Chapter 14 Solutions

Intermediate Accounting

Ch. 14 - How is periodic interest determined for...Ch. 14 - As a general rule, how should long-term...Ch. 14 - How are bonds and notes the same? How do they...Ch. 14 - What information is contained in a bond indenture?...Ch. 14 - On January 1, 2018, Brandon Electronics issued 85...Ch. 14 - How is the price determined for a bond (or bond...Ch. 14 - A zero-coupon bond pays no interest. Explain.Ch. 14 - Prob. 14.8Q Ch. 14 - Compare the two commonly used methods of...Ch. 14 - Prob. 14.10Q

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Solution Summary: The author explains how the unique terms of a debt agreement are encouraged by financial complications by the debtor (borrower).

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