Halvor Corporation is having financial difficulty and therefore has asked Frontenac National Bank to restructure its $5
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Presented below are three independent situations. Prepare the journal entry that Halvor would make for each of these restructurings.
a. Frontenac National Bank agrees to take an equity interest in Halvor by accepting ordinary shares valued at $3,700,000 in exchange for relinquishing its claim on this note. The ordinary shares have a par value of $1,700,000.
b. Frontenac National Bank agrees to accept land in exchange for relinquishing its claim on this note. The land has a book value of $3,250,000 and a fair value of $4,000,000.
c. Frontenac National Bank agrees to modify the terms of the note, indicating that Halvor does not have to pay any interest on the note over the 3-year period.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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