The Larisa Company is exiting bankruptcy reorganization with the following accounts:

	Book Value	Fair Value
Receivables	$ 80,000.00	$ 90,000.00
Inventory	$ 200,000.00	$ 210,000.00
Buildings	$ 300,000.00	$ 400,000.00
Liabilities	$ 300,000.00	$ 300,000.00
Common Stock	$ 330,000.00
Additional Paid in Capital	$ 20,000.00
Retained Earnings (deficit)	$ (70,000.00)

The company's assets have a $760,000 reorganization value. As part of the reorganization, the company's owners transferred 80 percent of the outstanding stock to the creditors.

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

View transaction list Journal entry worksheet 1 2 > Record the entry to reduce additional paid in capital balance to correct figure, to close out gain account, and to eliminate deficit. Note: Enter debits before credits. General Journal Debit Credit Transaction 2 Record entry Clear entry View general journal