Restructuring Debt

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Restructuring of Debt Data | Long-term debt consists of probable future sacrifices of economic benefits arising from present obligations that are not payable within a year or the operating cycle of the company, whichever is longer. Long term debt is a way to finance and gain capital when the company cash flow is minimal. To name a few types of long term debt: bonds payable, notes payable, mortgages payable, pension liabilities, and lease liabilities. This assignment will define basic terms such as long-term debt, bonds, mortgage, and capital leases. In addition answer questions in reference to the ABC Company journal entries, postretirement and note disclosure. A bond arises from a contract known as a bond indenture. A bond is…show more content…
A) Step 1: Bk value for the land-Fv of the land (2,400,000-1,950,000) = $450,000 which is a gain on disposition. Step 2: Subtract the fv of the asset from the total loan obligation (3,000,000-2,400,000) = $600,000 which is the gain on restructuring) Step 3: Compute the total gain and add the retained earnings to derive at retained earnings after the restructuring. $3,000,000 - $1,950,000= 1,050,000. ($639,180) + $1,050,000 = $410,820 Journal Entry Note Payable | $3,000,000 | | Gain on Restructuring | | $600,000 | Land | | $1,950,000 | Gain on Disposition | | $450,000 | (exchange of Land) | | | | | | B) SHAREHOLDERS’ EQUITY (DEFICIT) = Defined Benefit | | Common stock, $.01 par value; authorized | | 500,000 shares; issued 231,000 shares | 2,310 | Additional paid-in capital | 731,090 | Accumulated other comprehensive loss | (113,500) | Retained earnings (deficit) | (639,180) | Treasury stock | (60,580) | Total Shareholders’ Equity (Deficit) | (79,860) | | | | | | | | | TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 7,835,730 | * * SHAREHOLDERS EQUITY- Defined Contribution Plan | Common stock, $.01 par value; authorized 500,000 shares; issued 231,000 shares | 2,310 | Additional paid-in-capital | 731,090 | Accumulated other
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