Tasa Incorporated after having experienced financial difficulties in 2021, negotiated with a major creditor and arrived at an agreement to restructure a note payable on December 31, 2021. The creditor was owed a principal of P3,600,000 and interest of P400,000 but agreed to accept equipment worth 850,000 and a note receivable from Tasa's customer with carrying amount of P2,700,000. The equipment had an original cost of P900,000 and an accumulated depreciation of 300,000. a.What amount should be recognized as gain from extinguishment of debt on December 31, 2021?
Tasa Incorporated after having experienced financial difficulties in 2021, negotiated with a major creditor and arrived at an agreement to restructure a note payable on December 31, 2021. The creditor was owed a principal of P3,600,000 and interest of P400,000 but agreed to accept equipment worth 850,000 and a note receivable from Tasa's customer with carrying amount of P2,700,000. The equipment had an original cost of P900,000 and an accumulated depreciation of 300,000. a.What amount should be recognized as gain from extinguishment of debt on December 31, 2021?
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 15DQ
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Tasa Incorporated after having experienced financial difficulties in 2021, negotiated with a major
creditor and arrived at an agreement to restructure a note payable on December 31, 2021. The
creditor was owed a principal of P3,600,000 and interest of P400,000 but agreed to accept
equipment worth 850,000 and a note receivable from Tasa's customer with carrying amount of
P2,700,000. The equipment had an original cost of P900,000 and an
300,000.
a.What amount should be recognized as gain from extinguishment of debt on December 31,
2021?
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