Kwell Co. owes Kuto Bank P4,000,000 plus accrued interest of P360,000. The unamortized discount on the loan is P80,000. The debt is a 10-year, 12% loan. During 20x1, Kwell’s business deteriorated due to loss of demand for its services. On December 31, 20x1, Kuto Bank agrees to accept old equipment and cancel the entire debt. The equipment has a cost of P12,000,000, accumulated depreciation of P8,800,000 and fair value of P3,600,000. How much is the gain (loss) on the extinguishment of the debt?

Q: National Bank granted a 10-year loan to Abbo Company in the amount of P1,500,000 with a stated…

A: Carrying Value at closing = Note receivable + Direct Origination Cost - Non refundable Origination…

Q: Bramble Company owes $236,000 plus $21,500 of accrued interest to Sunland State Bank. The debt is a…

A: a. Prepare journal entries for Bramble Company and Sunland State Bank to record this debt…

Q: On December 31, 20x3, the carrying value of the loan receivable is approximately

A: Interest is the periodic obligation of the borrower to pay towards the sum borrowed. It is computed…

Q: Contina Co. owed Maunlad Bank a P3,000,000, three-year, 10% note payable dated January 1, 2012. The…

A: Restructuring in Notes Payable For the Restructuring of the Debt which are provided by the financial…

Q: This Company defaulted in two annual interest   payments on its P4,000,000 loan. Because of the…

A: As per IFRS 9, Financial instruments, the interest expense on the financial liability is recognized…

Q: nancial difficulties has negotiated a restructuring of its 10%, P10,000,000 note payable due on…

A: Interest expense refers to the costs incurred by a borrower while it tried to borrow funds or money…

Q: Pratt Industries owes First National Bank $5 million but, due to financial difficulties, is unable…

A:

Q: QUELL Co. owes PUT DOWN Bank P4,000,000 plus accrued interest of P360,000. The unamortized discount…

A: Here in this question, we are required to calculate how much gain/loss needs to book on…

Q: At January 1, 2016, Brainard Industries, Inc., owed Second BancCorp $12 million under a 10% note due…

A:

Q: On December I, Year 1, Traylor Company sells $100,000 of short-term trade receiv- ables to Main…

A: Derecognition is made for removal of any previous recognized financial asset or liability from the…

Q: Anteium Company owes $80,000 on a note payable that is currently due. The note is held by a local…

A: a. The note payable amount of $80,000 would be reported in the statement of financial affairs. The…

Q: On December 31, 2010 a company was indebted to Creditor Co. on a P2,000,000 10% note. Only interest…

A: On 31.12.2010, 10% Notes payable = P2000000 Interest rate = 10% Interest amount per annum = P2000000…

Q: Stanley Frozen Foods owes the bank $50,000 on a line of credit. Terms of the agreement specify that…

A: An inventory is the inventory that has purchased by the organization for the purpose of inventory.…

Q: Ivanhoe Company owes $179,000 plus $15,800 of accrued interest to Shamrock State Bank. The debt is a…

A: Debt settlement: A way to settle the debt or resolve the debt by allowing the debtor to pay a lump…

Q: The Nile Group is owed $1,010,000 by Scorpion Enterprises under an 10% note with three years…

A: Bad debt expense is the business expense that is incurs when the repayment of the credit priorly…

Q: Due to extreme financial difficulties, an entity negotiated a restructuring of 10%, P5,000,000 note…

A:

Q: Lolo Co. owes $150,000 in notes payable plus $12,000 of accrued interest to, the company is having…

A: The company can raise fund by borrowing the cash. If the cash is borrowed by issuing notes payable,…

Q: National Bank granted a 10-year loan to BBB Company in the amount of P1,500,000 with a stated…

A: Notes can be defined as a financial security which provides interest to its holder. To deal in…

Q: On January 1, 20X9, Fast Bank made a P2,000,000, 8% loan. The P160,00O interest is receivable at the…

A: Given: Carrying value of Loan=$2,000,000Rate of loan =8%Interest receivable every year =$160,000PV…

Q: On July 1, 2021, HAZELNUT Company acquired machinery worth ₱2,500,000 from PINE NUTS Corporation.…

A: Current liabilities are the liabilities the obligation relating to which are required to be…

Q: In 2X19, Land Corporation acquired land by paying P2,000,000 and signing a note with a face value of…

A: NOTE : As per BARTLEBY guidelines, when multiple sub parts are given then first three sub parts are…

Q: interest income

A: Interest income on note receivable = Value of note receivable * Rate of interest

Q: On Dec. 31, 20x1, Tissue Co. determines that its loan receivable from Breakfast Co. with a carrying…

A: Loan is an amount which a lender gives to a borrower to fulfil the financial need of the borrower at…

Q: Bank charged XYZ a 6-point non-refundable loan origination fee. The effective interest after…

A: Loan given by bank to its customer is treated as Financial Asset for bank and it will be a financial…

Q: On January 1, 20X9, Fast Bank made a P2,000,000, 8% loan. The P160,000 interest is receivable at the…

A: The original amount of the loan =2,000,000. It is mentioned that the borrower is experiencing…

Q: Strickland Company owes $200,000 plus $18,000 of accrued interest to Moran State Bank. The debt is a…

A: 1. Prepare journal entries for Strickland Company and Moran State Bank to record this debt…

Q: Larkspur Co. owes $202,500 to Cullumber Inc. The debt is a 10-year, 11% note. Because Larkspur Co.…

A: Gain on Land Disposition = fair value - book value = $146,600 - $92,800 = $53,800

Q: On July 1, 2021, HAZELNUT Company acquired machinery worth ₱2,500,000 from PINE NUTS Corporation.…

A: The notes payable would be considered as long-term liabilities whereas, accrued interest is…

Q: In 2X19, Land Corporation acquired land by paying P2,000,000 and signing a note with a face value of…

A: NOTE: As per BARTLEBY guidelines, when multiple sub parts are given then first three sub parts are…

Q: On December 31, 2021, LOL Company is experiencing extreme financial pressure and is in default in…

A: Debt restructuring is a process of modification in the terms of a loan obtained by a debtor from the…

Q: Extended the maturity to December 31, 2X23. • The P480,000 interest due on December 31, 2X21 was…

A: NOTE : As per BARTLE BY guidelines, when multiple sub parts are given then  the first three sub…

Q: Due to extreme financial difficulties, an entity negotiated a restructuring of 10%, P5,000,000 note…

A: Present Value-:Present Value also known as the current value of a prospective quantity of capital or…

Q: Danica Corporation sold one of its buildings on January 1, 2007 for P20,000,000. Danica received a…

A: Notes receivable December 31, 2008, will include only the principal portion of the P3,957,000. The…

Q: ABC Company, due to extreme financial difficulties has negotiated a restructuring of its 10%,…

A: The notes payable are the long-term liabilities because these are to be paid over more than one…

Q: On July 1, 2014, Mark Company acquired machinery worth P 2,500,000 from Julian Corporation. Terms of…

A: Note payable=Equipment value-Down payment=P 2,500,000-P 500,000=P 2,000,000

Q: Stanley Frozen Foods owes the bank $50,000 on a line of credit. Terms of the agreement specify that…

A:

Q: National Bank granted a 10-year loan to Abbo Company in the amount of P1,500,000 with a stated…

A: The question gives the following information:

Q: On December 31, 2012, Nolte Co. is in financial difficulty and cannot pay a note due that day. It is…

A: Gain (loss) on the transfer of the equipment =  Fair value of equipment -  face amount of the note

Q: Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank.…

A: Journal entry is a primary entry that records the financial transactions initially.

Q: Due to extreme financial difficulties, Aries Company negotiated a restructuring of a 10%,…

A:

Q: Mozely Company borrowed $400,000 on a 10 percent note payable to finance a new warehouse Mozely is…

A: Solution:- Calculation of the capitalize interest for the current year as follows under:-

Q: Gottlieb Co. owes $199,800 to Ceballos Inc. The debt is a 10-year, 11% note. Because Gottlieb Co. is…

A: a.

Q: On December 31, 2021, Empoy Company has overdue notes payable of P5,000,000 with accrued interest of…

A:

Q: On December 31, 2021, Empoy Company has overdue notes payable of P5,000,000 with accrued interest of…

A: Debt means total liabilities to be paid by the company. Debt restructuring means modifying the terms…

Q: On. Nov. 14, 20x1, Athena Co. sold its P30,000 loan receivable from Zevrek Co. to Devin Bank for…

A: Formula: Discount on Loan receivable = Total loan receivable - Cash received

Q: Sheffield Corporation is in the business of selling cattle. Due to recent diseases plaguing cattle,…

A: Formula would be, Present Value = +PV (Rate, period,, Future Value)

Q: M Company, owner of RM Mall, charges Hope Clothing Store, a rental fee of P60, 000 per month plus 5%…

A: Bad debts are the amount of money; the company fails to receive as the some of the debtor has become…

Q: On January 1, 20x1, ABC Bank extended a 10%, P1,000,000 loan to XYZ. Principal is due on January 1,…

A: Loan given by bank to its customer is treated as Financial Asset for bank and it will be a financial…