On December 31, 2014, Pilot's Credit Union agreed to restructure a $900,000, 8% loan receivable from Norma Corporation because of Norma's financial .At December 31 there was $36,000 of accrued interest for a six-month period.Terms of the restructuring agreement are as follows:
- Reduce the loan from $900,000 to $600,000;
- Extend the maturity date by 2 years from December 31, 2014 to December 31, 2016;
- Reduce the interest rate on the loan from 8% to 6%.
Required:
Compute the gain or loss that will be reported by Pilot's Credit Union.

Question

On December 31, 2014, Pilot's Credit Union agreed to restructure a $900,000, 8% loan receivable from Norma Corporation because of Norma's financial .At December 31 there was $36,000 of accrued interest for a six-month period.Terms of the restructuring agreement are as follows:
- Reduce the loan from $900,000 to $600,000;
- Extend the maturity date by 2 years from December 31, 2014 to December 31, 2016;
- Reduce the interest rate on the loan from 8% to 6%.  
Required:
Compute the gain or loss that will be reported by Pilot's Credit Union.

Quizplus · Accepted Answer

The Answer of On December 31, 2014, Pilot's Credit Union agreed to restructure a $900,000, 8% loan receivable from Norma Corporation because of Norma's financial .At December 31 there was $36,000 of accrued interest for a six-month period.Terms of the restructuring agreement are as follows:
- Reduce the loan from $900,000 to $600,000;
- Extend the maturity date by 2 years from December 31, 2014 to December 31, 2016;
- Reduce the interest rate on the loan from 8% to 6%.  
Required:
Compute the gain or loss that will be reported by Pilot's Credit Union.

On December 31, 2014, Pilot's Credit Union Agreed to Restructure