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Moon Corporation has suffered losses for several years and its debts total $ 9 5 0 , 0 0 0 . Moon's assets are valued

Moon Corporation has suffered losses for several years and its debts total $950,000. Moon's assets are
valued at $700,000. Moon's creditors agree to reduce Moon's debts to $650,000 to permit the corporation to
continue to operate. What amount of income must be recognized in the current year by Moon because of
the reduction of debt?
a. $50,000
b. $250,000
c. $300,000
d. $0
e. None of the answers provided is correct.
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