1. Sharon owns Lawrence Co. $16,000 on a note payable, plus $3,000 of unpaid interest. Lawrence agrees to accept an equipment in full settlement of the debt. The equipment is recorded on Sharon's books at $11,000, and it is currently worth $14,500. What types and amounts of gain or losses, if any, should be recorded by Sharon or this trouble debt restructuring? A. No gain or loss should be recognized. B. Gain on debt restructuring for $8,000 C. Gain on debt restructuring for $3,800; Gain on disposal of equipment for $2,200 D. Gain on debt restructuring for $4,500; Gain on disposal of equipment for $3,500Discount-Mart issued 1,000 units of $10,000 bonds on January 1, 20X1. The bonds have a ten-year term and pay interest semi-annually on June 30th and Dec 31st. Below is the partial bond amortization schedule for the bonds. Cash Decrease in balance of premium account Outstanding Balance Jan 1, 20X1 $108,115 June 30, 20X1 $5,000 $675 $107,439 Dec 31, 20X1 $5,000 $702 $106,737 June 30, 20X2 $5,000 $731 $106,006 Dec 31, 20X2 $5,000 $760 $105,246 What is the amount of interest expense to be reported in the income statement for the year ended on Dec 31, 20X1? A. $8,623 B. $4,298 $10,000 D. $4,325HKU Company is a publicly listed firm, and has reported the following accounts in shareholders' equity: Share capital - preferred shares 200,000 Share capital - ordinary class A shares 600,000 - ordinary class B shares 100,000 Unrealised profits 300,000 Unrealised losses (250,000) Retained earnings 500,000 Total equity 1,450,000 What's the maximum amount that HKU Company can distribute as dividends to ordinary shareholders? A. 1,450,000 B. 550,000 C. 500,000 D. 800,000