Becket Corporation's accountant has prepared the following balance sheet as of November 10, 2017, the date on

Question:

Becket Corporation's accountant has prepared the following as of November 10, 2017, the date on which the company is to release a plan for reorganizing operations under Chapter 11 of the Bankruptcy Reform Act:
BECKET Sheet
November 10, 2017
Assets
Cash $ 12,000
Accounts receivable (net). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,000
Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000
Inventory (net realizable value is expected
to approximate 80% of cost). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,000
Buildings (net). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248,000
Equipment (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,000
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 601,000
Liabilities and Equities
Accounts payable $ 129,000
Notes payable-current (secured by equipment) . . . . . . . . . . . . . . . . 220,000
Notes payable-(due in 2020)
(secured by land and buildings) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,000
Common stock ($10 par value). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
Retained earnings (deficit). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (133,000)
Total liabilities and equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 601,000
The company has presented the following proposal:
∙ The reorganization value of the company's assets just prior to issuing additional shares below, selling the company's investment, and conveying title to the land is set at $650,000 based on discounted future cash flows.
∙ of $20,000 are written off as uncollectible. Investments are worth $40,000, land is worth $80,000, the buildings are worth $300,000, and the equipment is worth $86,000.
∙ An outside investor has been found to buy 7,000 shares of at $11 per share.
∙ The Company's investments are to be sold for $40,000 in cash with the proceeds going to the holders of the current note payable. The remainder of these short-term notes will be converted into $130,000 of notes due in 2021 and paying 10 percent annual cash interest.
∙ All will be exchanged for $40,000 in notes payable due in 2018 that pay 8 percent annual interest.
∙ Title to land costing $20,000 but worth $50,000 will be transferred to the holders of the note payable due in 2020. In addition, these creditors will receive $180,000 in notes payable (paying 10 percent annual interest) coming due in 2024. These creditors also are issued 3,000 shares of previously unissued common stock. Becket retains the remainder of its land.
Prepare journal entries for Becket to record the transactions as put forth in this reorganization plan.
Common Stock
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