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Grouper Co. owes $198,200 to Monty Inc. The debt is a 10-year, 11% note. Because Grouper Co. is in financial trouble, Monty Inc. agrees to
Grouper Co. owes $198,200 to Monty Inc. The debt is a 10-year, 11% note. Because Grouper Co. is in financial trouble, Monty Inc. agrees to accept some land and cancel the entire debt. The property has a book value of $98,000 and a fair value of $141,200.
| (a) | Prepare the journal entry on Groupers books for debt restructure. | |
| (b) | Prepare the journal entry on Montys books for debt restructure. |
(If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
| No. | Account Titles and Explanation | Debit | Credit |
| (a) | Grouper Co.'s entry: | ||
| (b) | Monty Inc. entry: | ||
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