*121. On December 31, 2024, Nolte Co. is in financial difficulty and cannot pay a note due that day. It is a $3,000,000 note payable to Piper, Inc. Piper agrees to accept from Nolte equipment that has a fair value of $1,450,000, an original cost of $2,400,000, and accumulated depreciation of $1,150,000. Nolte should recognize a gain or loss on the debt restructure of a. $1,550,000 gain b. $200,000 gain. c. $1,750,000 gain. d. $1,550,000 loss. Ans: D, LO: 5, Bloom: AP, Difficulty: Difficult, Min: 3, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA PC: None, IMA: Reporting & Control: Financial Recordkeeping, IFRS: None Solution: ($3,000,000+ $300,000) [$1,250,000+ ($1,250,000 x .06 3)] = $1,825,000.