Equipment with a book values of $120,000 is sold in a liquidation process for cash of $110,000. This equipment was security for a $150,000 bank loan. Any remainder is consider unsecured, class 7. How would this transaction be reported on the Statement of Realization and Liquidation?

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The sale of the equipment results in a reduction of non-cash assets by its book value ($120,000), a loss of $10,000 (book value minus sale price) impacting owner's equity, and the cash received ($110,000) is used to partially pay the secured bank loan, leaving $40,000 as an unsecured liability.

Equipment with a Book Values of $120,000 Is Sold in a Liquidation