Becket Corporations accountant has prepared the following balance sheet as of November 10, 2017, the date on which the company is to release a plan for reorganizing operations under Chapter 11 of the Bankruptcy Reform Act:

BECKET CORPORATION

Balance Sheet

November 10, 2017

Assets

Cash $ 12,000

Accounts receivable (net) 61,000

Investments 26,000

Inventory (net realizable value is expected to approximate 80% of cost) 80,000

Land 57,000

Buildings (net) 248,000

Equipment (net) 117,000

Total assets $ 601,000

Liabilities and Equities

Accounts payable $ 129,000

Notes payablecurrent (secured by equipment) 220,000

Notes payable(due in 2020) (secured by land and buildings) 325,000

Common stock ($10 par value) 60,000

Retained earnings (deficit) (133,000)

Total liabilities and equities $ 601,000

The company has presented the following proposal:

• The reorganization value of the companys assets just prior to issuing additional shares below, selling the companys investment, and conveying title to the land is set at $650,000 based on discounted future cash flows.
• Accounts receivable of $20,000 are written off as uncollectible. Investments are worth $40,000, land is worth $80,000, the buildings are worth $300,000, and the equipment is worth $86,000.
• An outside investor has been found to buy 7,000 shares of common stock at $11 per share.
• The companys investments are to be sold for $40,000 in cash with the proceeds going to the holders of the current note payable. The remainder of these short-term notes will be converted into $130,000 of notes due in 2021 and paying 10 percent annual cash interest.
• All accounts payable will be exchanged for $40,000 in notes payable due in 2018 that pay 8 percent annual interest.
• Title to land costing $20,000 but worth $50,000 will be transferred to the holders of the note payable due in 2020. In addition, these creditors will receive $180,000 in notes payable (paying 10 percent annual interest) coming due in 2024. These creditors also are issued 3,000 shares of previously unissued common stock. Becket retains the remainder of its land.

Prepare journal entries for Becket to record the transactions as put forth in this reorganization plan.