A troubled debt restructuring will generally result in a
A) loss by the debtor and a gain by the creditor.
B) loss by both the debtor and the creditor.
C) gain by both the debtor and the creditor.
D) gain by the debtor and a loss by the creditor.

Question

Quizplus · Accepted Answer

In a troubled debt restructuring, the debtor is typically able to renegotiate the terms of the debt to more favorable conditions, which can result in a gain for the debtor due to reduced liabilities or more manageable repayment terms. Conversely, the creditor may incur a loss because the restructuring often involves the creditor agreeing to accept less than the full amount owed or extending the payment terms, which reduces the present value of the receivable.

A Troubled Debt Restructuring Will Generally Result in a