[HELP!!! ANSWER WITH SOLUTION]

In 2X19, Land Corporation acquired land by paying and signing a note with a face value of P6,000,000. On the note's due date, December 31, 2X21, Land owed P480,000 of accrued interest and P6,000,000 on the note. Land was in financial difficulty and was unable to make any payments. To solve the problem, Land and the bank agreed to amend the note as follows:

Extended the maturity to December 31, 2X23.

The P480,000 interest due on December 31, 2X21 was forgiven.

Land Corporation would be required to make an annual interest payment of P540,000 every December 31 starting 2X22.

Transaction cost incurred that is directly related to the debt restructuring was P 16,850.

As of December 31, 2X21, the yield rate based on the restructured debt and after considering the amount of transaction cost is 6.24%.

1. What type of debt restructuring is being described by the case?
2. What is the total gain from restructuring?
3. What amount should Land Corporation report as gain, before income taxes, in its 2X21 profit or loss?
4. What is the carrying amount of the obligation that should be reported in 2X22 statement of financial position?
5. Provide the journal entry for debt restructuring on December 31, 2X21.
6. Assuming you are the finance manager of Land Corporation, are you in favor of the type of restructuring that your company and the bank agreed to? Why?
7. Suppose the owner of Land Corporation wants an alternative to base his decision. Make a debt restructuring arrangement using the other types of debt restructuring that would give greater benefit to the company.