Business, 16.03.2022 14:00 putaprincess16

On December 31, 2020, American Bank enters into a debt restructuring agreement with Barkley Company, which is now experiencing financial trouble. The bank agrees to restructure a 12%, issued at par, $3,000,000 note receivable by the following modifications: 1. Reducing the principal obligation from $3,000,000 to $2,400,000.
2. Extending the maturity date from December 31, 2020, to January 1, 2024.
3. Reducing the interest rate from 12% to 10%.

Barkley pays interest at the end of each year. On January 1, 2024, Barkley Company pays $2,400,000 in cash to American Bank.

Required:
a. WIll the fain be recorded by Barkely be equal to the loss recorded by American Bank under the debt restructuring?
b. Cam Barkely Co. record a gain under the term modification mentioned above? Why?
c. Assuming that the interest rate Barkley should use to compute the interest expense in future period in 1.4276% prepare the interest payment schedule of the not for Barkley Co. after the debt restructuring?

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 19:00

What is credit and debit in accounting

Answers: 2

Answer

Business, 21.06.2019 20:00

During 2017, sheridan company expected job no. 26 to cost $300000 of overhead, $500000 of materials, and $200000 in labor. sheridan applied overhead based on direct labor cost. actual production required an overhead cost of $260000, $510000 in materials used, and $150000 in labor. all of the goods were completed. what amount was transferred to finished goods?

Answers: 1

Answer

Business, 21.06.2019 21:00

Which of the following statements is correct? a) due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of u.s. businesses (in terms of number of businesses) are organized as corporationsb) most businesses (by number and total dollar sales) are organized as proprietorships or corporation. however, if the business gets very large, it becomes advantageous to convert to a corporation, primarily because corporations have important tax advantages over proprietorships and partnerships.c) due to legal considerations related to ownership transfers and limited liability, which affect the ability to attract capital, most business (measured by dollar sales) is conducted by corporations in spite of large corporations' less favorable tax treatmentd) large corporations are taxed more favorably than proprietorshipse) corporate stockholders are exposed to unlimited liability

Answers: 2

Answer

Business, 22.06.2019 08:00

Why is it vital to maintain a designer worksheet? a. it separates the designs chosen for the season from those rejected by the company. b. it keeps a record of all designs created by the designer for a season. c. it charts out the development of an entire line through the season and beyond. d. it tracks the development of a design along with costing and production details. done

Answers: 1

Answer

You know the right answer?

On December 31, 2020, American Bank enters into a debt restructuring agreement with Barkley Company,...

Questions