Flint Products Inc. has the following account balances on March $31,2023$:

Inventory

Buildings $($net$)$

Patents $($net$)$

Bank loan payable

Common shares, no par value, $9,800$ shares outstanding

Deficit

$$373,500$

$675,000$

$557,500$

$325,500$

$833,000$

$(1,248,500)$

In April $2023,$ management agrees to a financial reorganization. As part of the reorganization creditors are willing to

forgive the debt in exchange for $100\%$ of the outstanding shares. It is determined that assets have the following fair

values: inventory $$157,500,$ patent $$253,000,$ and buildings $$1,100,500.$

Prepare the required journal entries for the financial reorganization. Use Deficit account. $($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 $0$ for the amounts. List all debit entries before

credit entries. Record journal entries in the order presented in the problem.$)$

Account Titles and Explanation

Deficit

$($To restate for impairments of assets$)$

Debit

$1,248,500$

$($To close Deficit account$)$

$($To restate assets and liabilities$)$

Credit