FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text: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 Payable
Cash
Debit
18440
14280
218280
Credit
18440
14280
218280
Transcribed Image Text:(b) Date Account Titles and Explanation
Marigold Trust's
2020
2021
2022
Bad Debt Expense
Allowance for Doubtful Accounts
Cash
Allowance for Doubtful Accounts
Interest Revenue
Cash
Allowance for Doubtful Accounts
Interest Revenue
(To record Interest Revenue)
Cash
Allowance for Doubtful Accounts
Notes Receivable
(To record maturity of Notes Receivable)
Debit
64,239
14280
Credit
64,239
000
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