Consider the following two circumstances of a problem debt restructuring and answer questions 24 and 25.

Circumstance Number 1: The sum of future payments that DEBTOR must make is $ 50,000 less than the amount that DEBTOR owes CREDITOR.

Circumstance Number 2: The sum of the future payments that the DEBTOR must make greater than the amount that DEBTOR owes the CREDITOR 24. How will the DEBTOR's accounting be?

 

25. How will the CREDITOR's accounting Circumstance 1 Circumstance2 Calculate Present Value of Future Payments Does not recognize loss al Recalculate discount rate Use original discount rate Immediate loss of $ 50,000 Calculate Present Value of Future Payments Recalculate discount rate Recalculate discount rate Calculate Present Value of Future Payments Calculate Present Value of Future Payments Use original discount rate Use original discount rate Immediate loss of $ S0,000 Does not recognize loss Use original discount rate Recalculate discount rate