Concord Corp. owes $251,000 to Marigold Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Concord Corp. isin financial trouble, Marigold Trust agrees to extend the maturity date to December 31, 2022, reduce the principal to $204,000, andreduce 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 isrequired, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount isentered. Do not indent manually.)(a) Date Account Titles and ExplanationConcord Corp.'s202020212022Notes PayableGain on Restructuring of DebtNotes PayableCashNotes PayableCashDebit1844014280218280Credit1844014280218280 (b) Date Account Titles and ExplanationMarigold Trust's202020212022Bad Debt ExpenseAllowance for Doubtful AccountsCashAllowance for Doubtful AccountsInterest RevenueCashAllowance for Doubtful AccountsInterest Revenue(To record Interest Revenue)CashAllowance for Doubtful AccountsNotes Receivable(To record maturity of Notes Receivable)Debit64,23914280Credit64,239000

Answer to Question (a): Journal Entries in the books of Concord Corp.…

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.

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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