In your audit of the financial statements of Wolfe Company for the year ended April 30, you find that a material account receivable is due from a company in reorganization under Chapter 11 of the Bankruptcy Act. You also learn that on May 28 several former members of the bankrupt company's management formed a new company and that the new company had issued a note to Wolfe Company that would pay off the bankrupt customer s account receivable over a four-year period.

What presentation, if any, should be made of this situation in the financial statements of Wolfe Company for the year ended April 30? Explain