In a troubled debt restructuring, assets with a book value of $200,000 and a fair value of $180,000 are transferred in full settlement of a $250,000 debt. How is this reported?

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The loss on asset disposition is calculated as the book value minus the fair value ($200,000 - $180,000 = $20,000). The gain on restructuring is the difference between the original debt and the fair value of the assets transferred ($250,000 - $180,000 = $70,000).

In a Troubled Debt Restructuring, Assets with a Book Value