othschild Chair Company, was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2011, and was due December 31, 2024. Annual interest was paid on December 31, 2019. At January 1, 2021, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuting of the terms of the debt agreement. REQUIRED: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1.-First Linconl Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair company's book at $13 million 2.-First Lincoln Bank agreed to a) forgive the interest accrued from last year, b) reduce the remaining four interest payments to $1 million each, and c) reduce the principal to $15 million

Q: On December 31, 2020, Rose National Bank enters into a debt restructuring agreement with Emerald…

A: Debt restructuring is a process  where a company  experiencing financial liquidity problems…

Q: On December 31, 2020, American Bank enters into a debt restructuring agreement with Flint Company,…

A: A journal entry is a type of accounting entry that is used to record a business transaction in a…

Q: exclude this note from current liabilities

A: Second option is wrong because even though the company demonstrates the ability to refinance before…

Q: On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only…

A: Debt Restructuring - It is kind of process which allows the public or private company facing cash…

Q: Excel Corporation is experiencing financial difficulty and has met with their creditor (BMO) to…

A: When a note payable bears no interest, it is called a non-interest bearing note. As Excel is not…

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: Due to extreme financial difficulties, Armand Company had negotiated a restructuring of a 10% P…

A: Annual interest expense = Carrying value of the bonds x market interest rate x no. of months/12…

Q: On January 1, 2019, Peter Corporation purchased a debt instrument at its face value of P3,000,000.…

A: Reclassification of Debt Instrument As a result debt securities may be reclassified from the…

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

A:

Q: On January 1, 2020, Granada Company had an overdue 10% note payable to First Bank at P8,000,000 and…

A: Annual Interest Payments (P6000000 x 12%) = P720000 Note Payable at the end of 4th year on Dec 31,…

Q: What is the present value of the new liability? What is the gain on modification of debt for 2021?…

A:

Q: On January 1, 2017, the Gray Corporation is delinquent on a P300,000 note to the National Bank on…

A: The notes payable are the liabilities to be paid beyond 120 months and these are recognized as…

Q: On January 1, 2021, Chong Company had an overdue 10% note payable to AprilBank at P8,000,000 with…

A: Overdue Date 01-01-2021 Principal Amount                        K 80,00,000.00 Accrued Interest…

Q: On January 1, 2021, Mara Company entered into a debt restructuring agreement with Clara Company…

A: Impairment loss:-Note receivable A note receivable is impaired if Carrying value  is greater than…

Q: Tamarisk Company in its first year of operations provides the following information related to one…

A: (a) Available-for-sale securities should be recorded at the fair value. Therefore, difference…

Q: On December 31, 2020, Camiguin Company shows the following data with respect to its matured…

A: An equity swap is a trade of future cash flows between two parties that enables each party to…

Q: On December 31, 2019, Carrboro Textile Company hard short-term debt in the form of notes payable…

A: Here, the company has refinanced the short term debt by entering into an agreement with worldwide…

Q: Total gains on the settlement of debt to be recognized in profit or loss:

A: PV of the new note Year Amount PV factor PV of the note 1 300000*5%= 15000 1/(1.1)1=…

Q: ABC Company has a P15,000,000, two-year note payable to  DEF  that matures October 31, 2021. ABC's…

A: Solution Concept The current portion of the long term debt is classified as the current liabilities…

Q: On December 31, 2017, ABC Bank enters into a debt restructuring agreement with XYZ INC, which is now…

A: No, the gain recorded by the Company XYZ is not equal to the loss recorded by the ABC Bank under the…

Q: On December 31, 2020, the Reliable Finance Company had P5,000,000 notes receivable from Burgundy…

A: When there are certain indications that the recoverable amount from the asset has been declined…

Q: On December 31, 2021, ABC Co. was indebted to XYZ Street Company on a P2M, 10% note. Only interest…

A: Debt reconstruction When the company faces financial distress and liquidity problem, company will…

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

A: Calculation of total present value of new debt: = (Debt amount ×PVF @10%, 3 years) +(Debt…

Q: Colt Company is indebted to Kent Company under an P8,000,000, 10 % 4-year note dated December 31,…

A:

Q: At January 1, 2021, Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $20…

A: S.No. Account titles and explanations Debit Credit 1) Land  $       3.00        Gain on disposal…

Q: During 2021 Nice Company experienced financial difficulties and is likely to default on a P500,000,…

A: calculation of gain from the debt restructuring are as follows

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

A: Debt restructuring means restructuring the terms like maturity, interest rate etc. or to swap with…

Q: Love International Corp. has renegotiated a restructuring of its 10%, P2 million unsecured note…

A: The notes are repaid in more than one year therefore these are treated as a long-term liability. The…

Q: On December 31, 2019, Kale Bank entered into a debt restructuring agreement with Miserable Corp.,…

A: Ans. P 56,000 Working Notes: Principle :  P 700,000 Rate of Interest: 8% Time : 1 Year

Q: On December 31, 2018, ABC Corp. acquired Garlic Corp.’s P1,000,000 notes for P927,880. The market…

A: The impairment is recognized when the value of assets is lower than its book value.

Q: At January 1, 2018, Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $20…

A:

Q: On December 31, 2019, GMC had a document payable with a value in the $ 100,000 books. GMC has faced…

A: The given debt restructuring involves both reduction of amount due and reduction of interest rates.…

Q: On December 31, 2020, American Bank enters into a debt restructuring agreement with Barkley Company,…

A: Note: Since we are entitled to answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit…

Q: On December 31, 2020, the Reliable Finance Company had P5,000,000 notes receivable from Burgundy…

A: Working Notes: Computation of present value of restructured notes receivable. 400000 * 0.83 =…

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: Marigold Company in its first year of operations provides the following information related to one…

A: Journal: Recording of a business transactions in a chronological order.

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

A: Total Present value of New Debt = Present value of New Debt + Present Value of Interest on New Debt…

Q: On December 31, 2021, ABC Co. was indebted to XYZ Street Company on a P2M, 10% note. Only interest…

A: Debt Restructuring Debt structing which was used for the corporate sector to restructure their debts…

Q: In its first year of operations, Sandhill Corporation purchased available-for-sale debt securıties…

A: When Available for sale securities are purchased, the record is made in fair value. The difference…

Q: Bella Company had an overdue 8% note payable to Marimar Bank at Php8,000,000 with acrrued interest…

A: Notes Payable: Known as long-term obligations, notes payable represent the money a firm owes to its…

Q: On December 31, 2020, American Bank enters into a debt restructuring agreement with Shamrock…

A: Loan: It is the amount of money borrowed from a person or bank or company for a certain period…

Q: Komissarov Company has a debt investment in the bonds issued by Keune Inc. The bonds were purchased…

A: Given information is: Komissarov Company has a debt investment in the bonds issued by Keune Inc. The…

Q: At January 1, 2021, Clayton Hoists Inc. owed Third BancCorp $12 million, under a 10% note due…

A: Prepare a journal entry for January 1, 2021:

Q: At January 1, 2018, Brainard Industries, Inc., owed Second BancCorp $12 million under a 10% note due…

A: 1.

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

A: Notes payable refers to the amount of the bill that the company owes from the vendors or suppliers.…

Q: Good Company has an overdue 8% notes payable to Better Company amounting to P8million and accrued…

A:

Q: What is the gain on extinguishment for 2020? *

A: Solution:- Given, Due to extreme financial difficulties, Armand Company had negotiated a…

Q: At January 1, 2018, NCI Industries, Inc., was indebted to First Federal Bank under a $240,000, 10%…

A: 1 ) Calculation of Present value of debt = ( $240,000 + ( $240,000 x 10 % ) )…

Q: At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $26 million under a 10% note due…

A: (1)

Q: Down Company has an overdue Notes Payable to City Bank of P8,000,000 and recorded accrued interest…

A: Gain on debt restructuring is the difference between current obligation less the present value of…

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.