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

	Book Value			Fair Value
Receivables	$	80,000		$	90,000
Inventory		200,000			210,000
Buildings		300,000			400,000
Liabilities		300,000			300,000
Common stock		330,000
Additional paid-in capital		20,000
Retained earnings (deficit)		(70,000	)

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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Record the entry to adjust asset values to fair value.

2. Record the entry to reduce additional paid in capital balance to correct figure, to close out gain account, and to eliminate deficit.