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Daniel Blossom is the sole shareholder of Blossom Inc., which is currently under bankruptcy court protection. As a debtor in possession, he has negotiated a
Daniel Blossom is the sole shareholder of Blossom Inc., which is currently under bankruptcy court protection. As a debtor in possession, he has negotiated a revised loan agreement with United Bank. Blossom Inc.s $year, note issued at par was refinanced with a $year, note. Assume the market rate of interest is at the refinancing date. Both Blossom and United Bank prepare financial statements in accordance with IFRS Click here to view the factor table PRESENT VALUE OF Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF b Prepare the journal entries to record this refinancing on the books of Blossom and on the books of United Bank. Assume for simplicity that United Bank had not previously recognized any impairment, although under the expected loss method it is likely that it would have recognized some loss. Round present value factor calculations to decimal places, eg and final answer to decimal places eg Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account titles and enter for the amounts. List all debit entries before credit entries. No Account Titles and Explanation Debit Credit Notes Payable Notes Payable Gain on Restructuring of Debt Modification Gain or Loss
Daniel Blossom is the sole shareholder of Blossom Inc., which is currently under bankruptcy court protection. As a debtor in possession, he has negotiated a revised loan agreement with United Bank. Blossom Inc.s $year, note issued at par was refinanced with a $year, note. Assume the market rate of interest is at the refinancing date. Both Blossom and United Bank prepare financial statements in accordance with IFRS
Click here to view the factor table PRESENT VALUE OF
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF
b Prepare the journal entries to record this refinancing on the books of Blossom and on the books of United Bank. Assume for simplicity that United Bank had not previously recognized any impairment, although under the expected loss method it is likely that it would have recognized some loss. Round present value factor calculations to decimal places, eg and final answer to decimal places eg Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account titles and enter for the amounts. List all debit entries before credit entries.
No Account Titles and Explanation
Debit
Credit
Notes Payable
Notes Payable
Gain on Restructuring of Debt
Modification Gain or Loss
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