Question
At the beginning of 2015 BSW issued at 97.3 $10,000,000 of notes payable to REAP at a stated rate of 7.2% for a period of
At the beginning of 2015 BSW issued at 97.3 $10,000,000 of notes payable to REAP at a stated rate of 7.2% for a period of 10 years. The debt had an annual coupon and 3 payments were made. During this time demand for the company's product failed to materialize and on Jan 1, 2018, the entities agreed to settle the debt with BSW signing title to its inventory of Murators. They had a book value of 10,000,000 and a fair value of 8,500,000.
Book the settlement entries for BSW and for REAP
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
