INTERMEDIATE ACCT (LL) IFRS W/ENGAGE
INTERMEDIATE ACCT (LL) IFRS W/ENGAGE
3rd Edition
ISBN: 9781119552147
Author: Kieso
Publisher: WILEY
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(Debtor/Creditor Entries for Continuation of Troubled Debt with New Effective Interest) Crocker Corp. owes D. Yaeger Corp. a 10-year, 10% note in the amount of $330,000 plus $33,000 of accrued interest. The note is due today, December 31, 2017. Because Crocker Corp. is in financial trouble, D. Yaeger Corp. agrees to forgive the accrued interest, $30,000 of the principal, and to extend the maturity date to December 31, 2020. Interest at 10% of revised principal will continue to be due on 12/31 each year.Assume the following present value factors for 3 periods. Check the following image for value factors. Instructions(a) Compute the new effective-interest rate for Crocker Corp. following restructure. (Hint: Find the interest rate that establishes approximately $363,000 as the present value of the total future cash flows.)(b) Prepare a schedule of debt reduction and interest expense for the years 2017 through 2020.(c) Compute the gain or loss for D. Yaeger Corp. and prepare a schedule of…
Concord Corp. owes $251,000 to Marigold Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Concord Corp. is in financial trouble, Marigold Trust agrees to extend the maturity date to December 31, 2022, reduce the principal to $204,000, and reduce the interest rate to 7%, payable annually on December 31. (a) Prepare the journal entries on Concord's books on December 31, 2020, 2021, 2022. (b) Prepare the journal entries on Marigold Trust's books on December 31, 2020, 2021, 2022. Click here to view factor tables. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) Date Account Titles and Explanation Concord Corp.'s 2020 2021 2022 Notes Payable Gain on Restructuring of Debt Notes Payable Cash Notes…
Colt Company is indebted to Kent Company under an P8,000,000, 10%, 4 year note dated December 31, 2018. The interest of P800,000 was paid on December 31, 2019 and 2020. During 2021, Colt Company experienced financial difficulties and is likely to default unless concessions are made. On December 31, 2021, Kent Company agreed to restructure the debt as follows: A.Interest of P800,000 for 2021, due December 31, 2021 was made payable on December 31, 2022.B.Interest for 2022 was waived. C.The principal amount was reduced from P8,000,000 to P7,000,000.   1. What is the interest expense to be recognized for 2022? 2. The gain (loss) on extinguishment of debt is:
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