Question
On December 31, 2020, Manny Ltd. owes Stew Corp. $50,000 on a 10% note payable. two years of interest is also unpaid and due. Manny
On December 31, 2020, Manny Ltd. owes Stew Corp. $50,000 on a 10% note payable. two years of interest is also unpaid and due. Manny cannot pay off the debt. Stew agrees to reduce the principal amount to $30,000, forgive the accrued interest owed, extend the due date to December 31,2023, and reduce the interest to 5% per year for the extended period. What amount of gain should Manny record?
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Cornerstones of Financial Accounting
Authors: Jay Rich, Jeff Jones
4th edition
978-1337690881, 9781337669450, 1337690880, 1337690899, 1337669458, 978-1337690898
