On December 31, 2025, American Bank enters into a debt restructuring agreement with Coronado Company, which is nowexperiencing financial trouble. The bank agrees to restructure a 12% , issued at par, $3,600,000 note receivable by the followingmodifications:2.3.Coronado pays interest at the end of each year. On January 1, 2029, Coronado Company pays $2,430,000 in cash to American Bank.(a)Reducing the principal obligation from $3,600,000 to $2,430,000.Extending the maturity date from December 31, 2025, to January 1, 2029.Reducing the interest rate from 12% to 10%.Your answer is partially correct.Can Coronado Company record a gain under this term modification?(b).Yes VIf yes, compute the gain for Coronado Company. If no, enter amount as 0.The gain for Coronado Company $eTextbook and MediaList of AccountsSave for LaterPrepare the journal entries to record the gain on Coronado's books. (If no entry is required, select "No Entry" for the account titles andenter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not Indent manually. List debitentry before credit entry.)DateDecember31, 2025Attempts: 1 of 3 used Submit AnswerAccount Titles and ExplanationDebitCredit

(a)ParticularsAmountAmountPre-restructure carrying amount$3,600,000Total future cash flowReduced…

On December 31, 2025, American Bank enters into a debt restructuring agreement with Coronado Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $3,600,000 note receivable by the following modifications: 1. Reducing the principal obligation from $3,600,000 to $2,430,000. Extending the maturity date from December 31, 2025, to January 1, 2029. Reducing the interest rate from 12% to 10%. 2. 3. Coronado pays interest at the end of each year. On January 1, 2029, Coronado Company pays $2,430,000 in cash to American Bank. (a) Can Coronado Company record a gain under this term modification? Your answer is partially correct. Yes (b) If yes, compute the gain for Coronado Company. If no, enter amount as 0. The gain for Coronado Company $ eTextbook and Media List of Accounts Save for Later Attempts: 1 of 3 used Submit Answer Prepare the journal entries to record the gain on Coronado's books. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.)

On December 31, 2025, American Bank enters into a debt restructuring agreement with Coronado Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $3,600,000 note receivable by the following modifications: 1. Reducing the principal obligation from $3,600,000 to $2,430,000. Extending the maturity date from December 31, 2025, to January 1, 2029. Reducing the interest rate from 12% to 10%. 2. 3. Coronado pays interest at the end of each year. On January 1, 2029, Coronado Company pays $2,430,000 in cash to American Bank. (a) Can Coronado Company record a gain under this term modification? Your answer is partially correct. Yes (b) If yes, compute the gain for Coronado Company. If no, enter amount as 0. The gain for Coronado Company $ eTextbook and Media List of Accounts Save for Later Attempts: 1 of 3 used Submit Answer Prepare the journal entries to record the gain on Coronado's books. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 30E

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On December 31, 2023, Green Bank enters into a debt restructuring agreement with Windsor Inc., which is now experiencing financial trouble. The bank agrees to restructure a $2.9-million, 10% note receivable issued at par by the following modifications: 1. Reducing the principal obligation from $2.9 million to $2.76 million 2. Extending the maturity date from December 31, 2023, to December 31, 2026 3. Reducing the interest rate from 10% to 8% Windsor pays interest at the end of each year. On January 1, 2027, Windsor pays $2.76 million in cash to Green Bank. Windsor prepares financial statements in accordance with IFRS 9. Prepare the interest payment entry for Windsor on December 31, 2025, and the entry on January 1, 2027. (Round answer to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries…
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On December 31, 2020, American Bank enters into a debt restructuring agreement with Shamrock Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $3,760,000 note receivable by the following modifications: 1. Reducing the principal obligation from $3,760,000 to $3,008,000. 2. Extending the maturity date from December 31, 2020, to January 1, 2024. 3. Reducing the interest rate from 12% to 10%. Shamrock pays interest at the end of each year. On January 1, 2024, Shamrock Company pays $3,008,000 in cash to American Bank. Assuming that the interest rate Shamrock should use to compute interest expense in future periods is 1.4276%, prepare the interest payment schedule of the note for Shamrock Company after the debt restructuring. (Round answers to 0 decimal places, e.g. 38,548.) SHAMROCK COMPANYInterest Payment Schedule After Debt RestructuringEffective-Interest Rate Date CashPaid InterestExpense…
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On December 31, 2020, American Bank enters into a debt restructuring agreement with Flint Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $ 2,110,000 note receivable by the following modifications: 1. Reducing the principal obligation from $ 2,110,000 to $ 1,688,000. 2. Extending the maturity date from December 31, 2020, to January 1, 2024. 3. Reducing the interest rate from 12% to 10%. Flint pays interest at the end of each year. On January 1, 2024, Flint Company pays $ 1,688,000 in cash to American Bank. Assuming that the interest rate Flint should use to compute interest expense in future periods is 1.4276%, prepare the interest payment schedule of the note for Flint Company after the debt restructuring. (Round answers to 0 decimal places, e.g. 38,548.)Assuming that the interest rate Flint should use to compute interest expense in future periods is 1.4276%, prepare the interest payment schedule of the…
On December 31, 2023, Concord Corporation has $8.21 million of short-term debt in the form of notes payable that are due in 2024 to Provincial Bank. On January 28, 2024, Concord enters into a refinancing agreement with the bank that permits it to refinance its debt by up to 63% of the gross amount of its accounts receivable. Receivables are expected to range between a low of $5.3 million in February and a high of $8.0 million in October during 2024. The interest cost of the maturing short-term debt is 12%, and the new agreement calls for a fluctuating interest rate at 2% above the prime rate (currently prime is 8%) with the notes due in 2025. Concord informed the bank that it wishes to refinance as much of its debt as possible prior to its December 31, 2023 balance sheet being issued on February 15, 2024. (a) Assuming that Concord follows ASPE, prepare a partial balance sheet for Concord at December 31, 2023, that shows how its $8.21 million of short-term debt should be presented.…