The following account balances are available from the ledger of Yutao Shui Corporation on December 31, 2022:On January 2, 2023, the corporation put into effect a shareholder-approved reorganization by agreeing to pass the common shares over to the creditors in full payment of the $260,000 Notes Payable, writing up Buildings by $135,600, and eliminating the deficit. Assume that Yutao Shui follows ASPE.

InstructionsPrepare the required journal entries for the financial reorganization of Yutao Shui.

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Common Shares (20,000 shares authorized and outstanding) Retained Earnings (Deficit) $1,000,000 (190,000)