This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: 150,000 350,000 At the end of years 2 and 3 ABC is unable to pay the interest and principal. The lender agrees to take the machine which has a fair value of $290,000 in exchange for the note and accrued interest. In the table below, write the journal entry at the end of year 3 that ABC would make to record the exchange of the machine for the note. 1 Notes payable 462,066 Interest payable 53,035 Machine 500,000 Accumulated depreciation, machine 150,000 Loss on disposal machine 60,000 Gain on debt restructuring 225,101 In the table below, write the journal entry at the end of year 3 that the lender would make to record the exchange of the machine for the note. Machine 290,000 Allowance for bad debts 225,101 Note receivable 462,066 Interest receivable 53,035 2...
View Full Document
This note was uploaded on 01/31/2011 for the course MGMT 351 taught by Professor Staff during the Spring '08 term at Purdue.
- Spring '08