complete all journal entries
Ristoni Company is in the process of emerging from a Chapter 11 bankruptcy. It will apply fresh start accounting as of December 31, 2017. The company currently has 37,000 shares of common stock outstanding with a $259,000 par value. As part of the reorganization, the owners will contribute 21,000 shares of this stock back to the company. A retained earnings deficit balance of $372,000 exists at the time of this reorganization. The company has the following asset accounts: Accounts receivable Inventory Land and buildings Equipment Book Value Fair Value $ 74,000 $ 52,000 101,000 79,000 503,000 550,000 81,000 70,000 The company's liabilities will be settled as follows. Assume that all notes will be issued at reasonable interest rates. Accounts payable of $87,000 will be settled with a note for $12,000. These creditors will also get 2,000 shares of the stock contributed by the owners. Accrued expenses of $42,000 will be settled with a note for $11,000. Note payable of $107,000 (due 2021) was fully secured and has not been renegotiated. Note payable of $202,000 (due 2020) will be settled with a note for $57,000 and 11,000 shares of the stock contributed by the Note payable of $192,000 (due 2018) will be settled with a note for $78,000 and 8,000 shares of the stock contributed by the Note payable of $242,000 (due 2019) will be settled with a note for $117,000. owners. owners. . Accounts payable of $87,000 will be settled with a note for $12,000. These creditors will also get 2,000 shares of the stock contributed by the owners. Accrued expenses of $42,000 will be settled with a note for $11,000. Note payable of $107,000 (due 2021) was fully secured and has not been renegotiated. Note payable of $202,000 (due 2020) will be settled with a note for $57,000 and 11,000 shares of the stock contributed by the owners. Note payable of $192,000 (due 2018) will be settled with a note for $78,000 and 8,000 shares of the stock contributed by the Note payable of $242,000 (due 2019) will be settled with a note for $117,000. owners. The company has a reorganization value of $826,000. Prepare all journal entries for Ristoni so that the company can emerge from the bankruptcy proceeding. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet Debit Credit No Transaction General Journal 1 1 Land and buildings Goodwill No Transaction Debit Credit 1 1 General Journal Land and buildings Goodwill Accounts receivable Inventory Equipment Additional paid-in capital 2 2. Common stock Additional paid-in capital 3 3 Accounts payable Note payable Common stock Additional paid-in capital Gain on debt discharge 4 4 Accrued expenses > Gain on debt discharge 5 5 Note payable Note payable Common stock OOO 6 6 Note payable Note payable Common stock Additional paid-in capital Gain on debt discharge OOOO 7 7 Note payable Note payable Gain on debt discharge 8 8 Additional paid-in capital Gain on debt discharge Retained earnings
