The Larisa Company is exiting bankruptcy reorganization with the following account balances:

Net Book Value Fair Value

Receivables $ $80,000$ $ $90,000$

Inventory $200,000210,000$

Buildings $300,000400,000$

Liabilities $800,000800,000$

Common stock $130,000$

Additional paid$-$in capital $20,000$

Retained earnings $($deficit$)(370,000)$

Larisa Company$$s assets have a $$760,000$ reorganization value. As part of the reorganization plan, the company$$s owners transferred $80$ percent of the outstanding stock to the creditors in exchange for a $$500,000$ reduction in the liabilities.

Required:

Prepare the journal entry $($or entries$)$ necessary to adjust the company$$s records to fresh start accounting.