Easy Corp.owes Hard, Inc., $30, 000 on a note payable, plus $1, 800 interest.Hard agrees to accept 400 shares of Easy common stock in full settlement of the debt.Easy stock has a par value of $10 and a current market value of $70 per share.As a result of the debt restructuring, Easy Corp.should record an

Question

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Easy Corp. should record an ordinary gain of $3,800 because the total value of the shares given ($28,000) is less than the total debt ($31,800), resulting in a gain from restructuring the debt.

Easy CorpOwes Hard, Inc