During 2018 Marquis Company was encountering financial difficulties and seemed likely to default on a $300,000, 10%, four-year note dated January 1, 2016, payable to Third Bank. Interest was last paid on December 31, 2017. On December 31, 2018, Third Bank accepted $250,000 in settlement of the note. Ignoring income taxes, what amount should Marquis report as a gain from the debt restructuring in its 2018 income statement?

Question

Quizplus · Accepted Answer

$300,000 + 10% ($300,000) - 250,000 = $80,000

During 2018 Marquis Company Was Encountering Financial Difficulties and Seemed