Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Due to adverse economic circumstances and poor management, Sultan Company has negotiated a restructuring of its P10,000,000 note payable to Kudarat Bank. Kudarat Bank has

Due to adverse economic circumstances and poor management, Sultan Company has negotiated a restructuring of its P10,000,000 note payable to Kudarat Bank. Kudarat Bank has agreed to reduce the face value of the note to P8,000,000 and extend the due date three years from the date of restructuring. However the interest rate was increased from 15% to 21%. The restructuring will occur on December 31, 2020. There is no unpaid interest on the restructured loan at this time. The tax rate is 30%. In accordance with PFRS 9, how much gain should be recognized on modification of terms? (Round off present value factors to four decimal places)

A P2,000,000 B P0 C P 904,224 DP632,957

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Gleim CIA Review Part 2 Practice Of Internal Auditing

Authors: Irvin N. Gleim

2020 Edition

1618542648, 978-1618542649

More Books

Students also viewed these Accounting questions