1. Explanation Troubled Debt Restructuring: A troubled debt restructuring happens if a creditor, for legal or economic reasons associated to a debtor’s financial complications, grants a concession to a debtor that would not be otherwise considered. Prepare journal entry : Date Account Title and Explanation Debit ($) Credit ($) January 2019 Notes payable 300,000 Interest payable 66,000 Gain on debt restructure (1) 16,000 Common stock 100,000 Additional-paid-in capital on common stock 250,000 (To record debt restructuring) Table (1) Notes payable is a liability and it is decreased. Therefore, debit notes payable account by $300,000. Interest payable is a liability and it is decreased. Therefore, debit interest payable account by $66,000. Gain on debt restructure is a component of stockholders’ equity and it is increased. Therefore, credit gains on debt restructure account by $16,000. Common stock is a component of stockholders’ equity and it is increased. Therefore, credit common stock account by $100,000. Additional-paid-in capital is a component of stockholders’ equity and it is increased... 2. To determine Journalize entries to record the restructuring agreement.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN: 9781337788281

Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher: Cengage Learning

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Chapter 14, Problem 29E

To determine

Journalize entries to record the restructuring agreement.

To determine

Journalize entries to record the restructuring agreement.

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Chapter 14, Problem 28E

Chapter 14, Problem 30E

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Chapter 14 Solutions

Intermediate Accounting: Reporting And Analysis

Ch. 14 - Prob. 1GI Ch. 14 - Why does issuing debt result in an income tax...Ch. 14 - At the beginning of 2018, corporate tax rates...Ch. 14 - What is a bond? Define face value, maturity date,...Ch. 14 - What is the difference between a mortgage bond and...Ch. 14 - Prob. 6GI Ch. 14 - Prob. 7GI Ch. 14 - Prob. 8GI Ch. 14 - Prob. 9GI Ch. 14 - Prob. 10GI

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