On December 31, 2013, Albright Bank restructures an $800,000, 12% note receivable with $192,000 of accrued interest so that the new principal is $750,000, payable in four years at 10%. Present value factors for n = 4 years are:
Required:
a.Prepare the journal entry to record the loss on restructuring.
b.Prepare the journal entry to record the 2013 interest revenue.
c.Compute the carrying value of the note on December 31, 2013.
d.Compute the carrying value of the note on December 31, 2017 before the payment is received.

Question

On December 31, 2013, Albright Bank restructures an $800,000, 12% note receivable with $192,000 of accrued interest so that the new principal is $750,000, payable in four years at 10%. Present value factors for n = 4 years are:  
Required: 
a.Prepare the journal entry to record the loss on restructuring.
b.Prepare the journal entry to record the 2013 interest revenue.
c.Compute the carrying value of the note on December 31, 2013.
d.Compute the carrying value of the note on December 31, 2017 before the payment is received.

Quizplus · Accepted Answer

The Answer of On December 31, 2013, Albright Bank restructures an $800,000, 12% note receivable with $192,000 of accrued interest so that the new principal is $750,000, payable in four years at 10%. Present value factors for n = 4 years are:  
Required: 
a.Prepare the journal entry to record the loss on restructuring.
b.Prepare the journal entry to record the 2013 interest revenue.
c.Compute the carrying value of the note on December 31, 2013.
d.Compute the carrying value of the note on December 31, 2017 before the payment is received.

On December 31, 2013, Albright Bank Restructures an $800,000, 12