During 2021, tesa Company experienced financial difficulties and is likely to default on a P5,000,000, 15% three year note dated January 1, 2019 payable to Bank of the Pasa Island. On December 31, 2021, the bank agreed to settle the note and unpaid interest of P750,000 for P4,100,000 cash payable on January 31, 2022. . What amount should be reported as gain from extinguishment of debt in 2021 balance sheet?
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During 2021, tesa Company experienced financial difficulties and is likely to default on a
P5,000,000, 15% three year note dated January 1, 2019 payable to Bank of the Pasa Island. On
December 31, 2021, the bank agreed to settle the note and unpaid interest of P750,000 for
P4,100,000 cash payable on January 31, 2022.
. What amount should be reported as gain from extinguishment of debt in 2021 balance
sheet?
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- Marmol Corporation uses the allowance method for bad debts. During 2019, Marmol charged 50,000 to bad debt expense and wrote off 45,200 of uncollectible accounts receivable. These transactions resulted in a decrease in working capital of: a. 0 b. 4,800 c. 45,200 d. 50,000During 2021, PUMPKIN Company experienced financial difficulties and is likely to default on a ₱5,000,000, 15% three-year note dated January 1, 2019, payable to Summit Bank. On December 31, 2021, the bank agreed to settle the note and unpaid interest of ₱750,000 for 2021 for ₱4,100,000 cash payable on January 31, 2022. What amount should PUMPKIN report as gain or loss from extinguishment of debt in its 2021 income statement? (If gain, maintain as is; if loss, put a negative (-) sign before the numerical figure) * ANSWER IN GOOD ACCOUNTING FORM. THANK YOU :)RM Beach Bank loaned Dynamite Company P7,500,000 on January 1, 2018. The terms of the loan were payment in full on January 1, 2023 plus interest payment at 11%. The interest payment was made as scheduled on January 1, 2019. However, due to financial setbacks, Dynamite was unable to make its 2020 interest payment. RM Beach considers the loan impaired and projects the cash flows from the loan as of December 31, 2020. Assume that the bank accrued the interest at December 31, 2019, but did not continue to accrue interest due to the impairment of the loan. The projected cash flows are: December 31, 2021- P500,000; December 31, 2022- P1,000,000; December 31, 2023- P2,000,000; December 31, 2024- P4,000,000. Using two decimal places for the present value factor, how much is the loan impairment loss on December 31, 2020? A. P5,360,000 B. P2,965,000 C. P2,140,000 D. P2,240,000
- During 2020, Dream Company experienced financial difficulties and is likely to default on a P5,000,000, 15% three-year note dated January 1, 2018, payable to Star Bank. On December 31, 2020, the bank agreed to settle the note and unpaid interest of P750,000 for P4,000,000 cash payable on January 31, 2017. What amount should be reported as gain from extinguishment of debt in the 2020 income statement? -0- 1,000,000 2,250,000 1,750,000CPA Bank Co. loaned P6,750,000 to a borrower on January 1, 2018. The terms of the loan were payment in full on January 1, 2023 plus annual interest payment at 12%. The interest payment was made as scheduled on January 1, 2019. However, due to financial setbacks, the borrower was unable to make the 2020 interest payment. The bank considered the loan impaired and projected the cash flows from the loan on December 31, 2020. The bank has accrued the interest on December 31, 2019, but did not continue to accrue interest for 2020 due to the impairment of the loan. The projected cash flows are: December 31, 2021, P1,125,000; December 31, 2022, P1,500,000; December 31, 2023, P1,875,000 and December 31, 2024, P2,250,000. The present value of 1 at 12% is 0.89 for one period, 0.80 for two periods, 0.71 for three periods and 0.64 for four periods. What is the carrying amount loan receivable as of December 31, 2021?On January 1, 2019, an entity was indebted to a bank under a P4,800,000, 10% loan. The loan was dated January 1, 2017 and was due on December 31, 2020. The annual interest was last paid on December 31, 2017. The entity was experiencing financial troubles and therefore the bank considered the loan impaired. The bank agreed to reduce last year's interest and the remaining two years interest payments to P200,000 each and delay all such payments on December 31, 2020. The present value of 1 at 10% for 2 periods is 0.83. The entity also reported the net realizable value of accounts receivable in the amounts of P1,000,000 and P1,200,000 on December 21, 2019 and 2018, respectively. It was also disclosed that the allowance for doubtful accounts on December 31, 2019 and 2018 were P100, 000 and P130,000 respectively. Credit sales amounted to P4,770,000 & collections from customers totaled P4,800,000. Certain accounts were written off during the year.What is the impairment on the loan for…
- During 2020 Hingalo Company experienced financial difficulties and is likely to default on a P500,000, 15%, three-year note dated January 1, 2019, payable to Maawain National Bank. On December 31, 2020, the bank agrees to settle the note and unpaid interest of P75,000 for 2020 for P50,000 cash and marketable securities carried at P385,000. What amount should Hingalo report as a gain from extinguishment of debt in its 2020 income statement?ABC Company after having experienced financial difficulties in 2020 negotiated with a major creditor and arrived at an agreement to restructure its notes payable on December 31, 2020. The creditor was owed principal of P3,600,000 and interest of P400,000 but agreed to accept an equipment worth P700,000 and notes receivable from an ABC Company's customer with carrying amount of P2,700,000. The equipment had original cost of P900,000 and accumulated depreciation of P300,000. How much should be recognized as gain from debt restructuring on December 31, 2020? Round answer to whole number.DE LA CRUZ Company received a 10%,180 day note from its customeron April 1, 2021. The note has a face value of P500,000. The companyendorsed the note, without recourse, to a bank on May 31, 2021. Thebank discounted the note at 12%.The debit to loss on discounting amounts at discount dateamounted to?
- On December 31,2019, Halen company performed environmental consulting services for Stuart Corporation was short of cash, and Halen company agreed to accept 900,000 zero-interest-bearing note due December 31,2021 as payment in full. Stuart Corporation is somewhat of a credit risk and typically borrows funds at a rate of10%. (PVIFA n=2,i=10% =1.7355 and PVIF n=2,i=10% =0.8264)Instruction :3.1 Prepare the journal entry to record the transaction of December 31, 2019, for Halen company.3.2 Assuming Halen’s fiscal year-end is December 31, prepare the journal entry for December 31,2020.On December 31, 2021, Empoy Company has overdue notes payable of P5,000,000 with accrued interest of P500,000. The company is threatened with a court suit if it would not settle its debt. The company entered into an agreement with the creditor to transfer real estate carried in the books of Empoy at P3million. The real estate has a current fair market value of P4.5million. What was the total amount of gain reported by Empoy as a result of debt restructuring/ a.) 2,500,000 b.) 1,500,000 c.) 1,000,000 d.) 500,000On December 31, 2021, Empoy Company has overdue notes payable of P5,000,000 with accrued interest of P500,000. The company is threatened with a court suit if it would not settle its debt. The company entered into an agreement with the creditor to transfer real estate carried in the books of Empoy at P3million. The real estate has a current fair market value of P4.5million. What was the total amount of gain reported by Empoy as a result of debt restructuring? 2,500,000 1,500,000 1,000,000 500,000