Restructuring debt - Restructuring Debt Part A) ABCompany,...

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Restructuring Debt Part A) ABCompany, Inc. is financially in distress and is now reorganizing. The management team has requested a report of the company’s restructuring the debt by using company’s available assets. On a good note, the bank has approved to surrender the outstanding notes and barter for the fixed assets. There are three types of classification for long-term debt. The first one is bonds payable, second one is mortgage loan, and the third one is capital leases. Bonds payable can either be secured or unsecured. Secured bonds are tied in with collaterals such as a mortgage or an automobile incase the company fails to pay, the bondholders can collect the collateral as payment. Unsecured bonds simply rely on the company’s pledge to pay. Some bonds have a stated interest rate whereas others have a discounted sale rate with interest rate already applied. When preparing a financial statement, every features of the bond, including bonds’ restrictions and agreement must be recorded. Mortgage loan in the United States are usually done through a promissory note or note
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Restructuring debt - Restructuring Debt Part A) ABCompany,...

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