Check My Work (No more tries available) Debt Restructuring: Asset Swap The compa
ID: 2405910 • Letter: C
Question
Check My Work (No more tries available) Debt Restructuring: Asset Swap The company has bonds payable with a total face value of $90,000 and a carrying value of $103,000. In addition, unpaid interest on the bonds has been accrued in the amount of $4,000. The lender has agreed to the settlement of the bonds in exchange for land worth $90,000. The land has a historical cost of $64,000. Hide Make the journal entry necessary on the books of the borrower to record this settlement of the bonds payable. If an amount box does not require an entry, leave it blank.
Explanation / Answer
Bond payable a/c
accrued Interest payable a/c
To Land a/c
To gain on asset transfe a/c
To Gain on settlement a/c
(Being bond payment settled by excanging land)
$103,000
$4,000
$64,000
$26,000
$17,000
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Date Genral journal Debit CreditBond payable a/c
accrued Interest payable a/c
To Land a/c
To gain on asset transfe a/c
To Gain on settlement a/c
(Being bond payment settled by excanging land)
$103,000
$4,000
$64,000
$26,000
$17,000