1. During 2019, Ginger Company acquired land by paying $75,000 down and signing a note with a maturity amount of $1 million. On the note's due date, December 31, 2024, Ginger Company owed $40,000 of accrued interest and $1 million principal on the note.

   Ginger Company was in financial difficulty and was unable to make any payments. Ginger Company and the bank agreed to amend the note as follows:

   • The $40,000 of interest due on December, 2024 was forgiven.
   • The principal of the note was reduced from $1 million to $950,000 and the maturity date extended 1 year to December 31, 2025.
   • Ginger Company would be required to make one interest payment totaling $30,000 on December 31, 2025.

   As a result of the troubled debt restructuring, Ginger Company should report a gain, before taxes in its December 31, 2024 income statement of:

   		$50,000
   		$60,000
   		$40,000
   		$90,000