Problem 14 19 Kingbird Corp owes Blossom Corp a $117,430, 10 year, 10 note issued at par plus $11,743 of accrued interest The note is due today, December 31, 2020 Because Kingbird Corp is in financial trouble, Blossom Corp agrees to forgive the accrued interest and $10,690 of the principal, and to extend the maturity date to December 31, 2023 Interest at 10 of the revised principal will continue to be due on December 31 of each year Assume the market rate of interest is 10 at the date of refinancing Kingbird and Blossom prepare financial statements in accordance with IFRS Click here to view the factor table PRESENT VALUE OF 1 Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1 Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, determine if this is a settlement or a modification ( Hint Refer to Chapter 3 for tips on calculating ) SettlementModification Prepare a schedule of the debt reduction and interest expense for the years 2020 through 2023 (Do not leave any answer field blank Enter 0 for amounts ) Kingbird Corp SCHEDULE OF DEBT REDUCTION AND INTEREST EXPENSE AMORTIZATION Date Cash Interest Effective Interest (Market) Change in Carrying Amount Carrying Amount 12 31 20 $ 12 31 21 $ $ $ 12 31 22 12 31 23 12 31 23 Calculate the gain or loss for Blossom Corp and prepare a schedule of the receivable reduction and interest income for the years 2020 through 2023 (Round answers to 0 decimal places, e g 5,275 Do not leave any answer field blank Enter 0 for amounts ) GainLoss on restructure $ Blossom Corp Date Cash Interest Effective Interest (Market) Change in Carrying Amount Carrying Amount of Note 12 31 20 $ 12 31 21 $ $ $ 12 31 22 12 31 23 12 31 23 Prepare all the necessary journal entries on the books of Kingbird Corp for the years 2020, 2021, and 2022 (Round answers to 0 decimal places, e g 5,275 Credit account titles are automatically indented when the amount is entered Do not indent manually If no entry is required, select No Entry for the account titles and enter 0 for the amounts ) Prepare all the necessary journal entries on the books of Blossom Corp for the years 2020, 2021, and 2022 Assume that Blossom had not previously recognized any impairment (Round answers to 0 decimal places, e g 5,275 Credit account titles are automatically indented when the amount is entered Do not indent manually If no entry is required, select No Entry for the account titles and enter 0 for the amounts )

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Problem 14-19 Kingbird Corp. owes Blossom Corp. a $117,430, 10-year, 10% note issued at par plus $11,743 of accrued interest. The note is due today,

Problem 14-19

Kingbird Corp. owes Blossom Corp. a $117,430, 10-year, 10% note issued at par plus $11,743 of accrued interest. The note is due today, December 31, 2020. Because Kingbird Corp. is in financial trouble, Blossom Corp. agrees to forgive the accrued interest and $10,690 of the principal, and to extend the maturity date to December 31, 2023. Interest at 10% of the revised principal will continue to be due on December 31 of each year. Assume the market rate of interest is 10% at the date of refinancing. Kingbird and Blossom prepare financial statements in accordance with IFRS. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.

Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, determine if this is a settlement or a modification. (Hint: Refer to Chapter 3 for tips on calculating.)

SettlementModification

Prepare a schedule of the debt reduction and interest expense for the years 2020 through 2023. (Do not leave any answer field blank. Enter 0 for amounts.)

Kingbird Corp. SCHEDULE OF DEBT REDUCTION AND INTEREST EXPENSE AMORTIZATION
Date	Cash Interest	Effective Interest (Market)	Change in Carrying Amount	Carrying Amount
12/31/20				$
12/31/21	$	$	$
12/31/22
12/31/23
12/31/23

Calculate the gain or loss for Blossom Corp. and prepare a schedule of the receivable reduction and interest income for the years 2020 through 2023. (Round answers to 0 decimal places, e.g. 5,275. Do not leave any answer field blank. Enter 0 for amounts.)

GainLoss

on restructure $

Blossom Corp.
Date	Cash Interest	Effective Interest (Market)	Change in Carrying Amount	Carrying Amount of Note
12/31/20				$
12/31/21	$	$	$
12/31/22
12/31/23
12/31/23

Prepare all the necessary journal entries on the books of Kingbird Corp. for the years 2020, 2021, and 2022. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Prepare all the necessary journal entries on the books of Blossom Corp. for the years 2020, 2021, and 2022. Assume that Blossom had not previously recognized any impairment. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)