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othschild Chair Company, was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2011, and was due December 31, 2024. Annual interest was paid on December 31, 2019. At January 1, 2021, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuting of the terms of the debt agreement. REQUIRED: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1.-First Linconl Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair company's book at $13 million 2.-First Lincoln Bank agreed to a) forgive the interest accrued from last year, b) reduce the remaining four interest payments to $1 million each, and c) reduce the principal to $15 million

othschild Chair Company, was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2011, and was due December 31, 2024. Annual interest was paid on December 31, 2019. At January 1, 2021, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuting of the terms of the debt agreement. REQUIRED: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1.-First Linconl Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair company's book at $13 million 2.-First Lincoln Bank agreed to a) forgive the interest accrued from last year, b) reduce the remaining four interest payments to $1 million each, and c) reduce the principal to $15 million

Intermediate Accounting: Reporting And Analysis
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
Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity
Section: Chapter Questions
Problem 6E: Balance Sheet Baggett Companys balance sheet accounts and amounts as of December 31, 2019, are shown...
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Rothschild Chair Company, was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2011, and was due December 31, 2024. Annual interest was paid on December 31, 2019. At January 1, 2021, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuting of the terms of the debt agreement.

REQUIRED:

Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below:

1.-First Linconl Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair company's book at $13 million

2.-First Lincoln Bank agreed to a) forgive the interest accrued from last year, b) reduce the remaining four interest payments to $1 million each, and c) reduce the principal to $15 million

ROTHSCHILD CHAIR COMPANY, INC. General Journal Account Debit Credit January 1, 2021 Bad debt expense Interest receivable Allowance for uncollectible accounts December 31, 2021 Cash Allowance for uncollectible accounts Interest revenue December 31, 2022 Cash Allowance for uncollectible accounts Interest revenue December 31, 2023 Cash Allowance for uncollectible accounts Interest revenue December 31, 2024 Cash Allowance for uncollectible accounts Interest revenue Cash Allowance for uncollectible accounts Amortization Schedule Cash Effective Increase in Interest Interest Ralance Outstandina
Transcribed Image Text:ROTHSCHILD CHAIR COMPANY, INC. General Journal Account Debit Credit January 1, 2021 Bad debt expense Interest receivable Allowance for uncollectible accounts December 31, 2021 Cash Allowance for uncollectible accounts Interest revenue December 31, 2022 Cash Allowance for uncollectible accounts Interest revenue December 31, 2023 Cash Allowance for uncollectible accounts Interest revenue December 31, 2024 Cash Allowance for uncollectible accounts Interest revenue Cash Allowance for uncollectible accounts Amortization Schedule Cash Effective Increase in Interest Interest Ralance Outstandina
ROTHSCHILD CHAIR COMPANY, INC. General Journal Account Requirement 1: Debit Credit Land Bad debt expense Notes receivable Accrued interest receivable Requirement 2: ROTHSCHILD CHAIR COMPANY, INC. Analysis Previous Value: Accrued 2020 interest Principal Carrying amount of the receivable New Value: Interest Principal Present value of the receivable Loss: ROTHSCHILD CHAIR COMPANY, INC. General Journal Account Debit Credit lanuan 1 2021
Transcribed Image Text:ROTHSCHILD CHAIR COMPANY, INC. General Journal Account Requirement 1: Debit Credit Land Bad debt expense Notes receivable Accrued interest receivable Requirement 2: ROTHSCHILD CHAIR COMPANY, INC. Analysis Previous Value: Accrued 2020 interest Principal Carrying amount of the receivable New Value: Interest Principal Present value of the receivable Loss: ROTHSCHILD CHAIR COMPANY, INC. General Journal Account Debit Credit lanuan 1 2021
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