Yaz Industries has outstanding notes payable with California Bank due in 13 months.
In addition, Yaz currently owes interest on the note. Yaz is in financial difficulty and renegotiates
to settle the debt. California Bank agrees to accept cash and shares of Yaz stock.
The stock has a par value of $1 per share and a market value of $35 per share.
Based on your assigned terms for the settlement, record the entry for Yaz for the restructuring
of the debt
	Name	Note Payable	Interest due	Cash paid	shares given
	Gabriel	$ 10,000,000	$ 450,000	$ 6,000,000	10,000
	Sarah	$ 8,000,000	$ 360,000	$ 6,000,000	8,000
	Raul	$ 7,000,000	$ 350,000	$ 5,500,000	7,000
	Jessica	$ 6,000,000	$ 300,000	$ 4,500,000	15,000
	Bujar	$ 1,000,000	$ 50,000	$ 800,000	1,000
	Genesis	$ 12,000,000	$ 600,000	$ 9,000,000	60,000
	Ariana	$ 9,000,000	$ 540,000	$ 7,000,000	50,000
	Belinda	$ 5,500,000	$ 400,000	$ 5,000,000	10,000
	Alan	$ 10,000,000	$ 325,000	$ 9,000,000	4,000
	Michael	$ 12,500,000	$ 250,000	$ 7,000,000	120,000
	Li	$ 11,000,000	$ 2,000,000	$ 8,000,000	100,000
	Lesley	$ 10,000,000	$ 500,000	$ 6,000,000	80,000
	Melissa	$ 4,000,000	$ 420,000	$ 850,000	50,000
	Aldo	$ 12,000,000	$ 300,000	$ 9,000,000	40,000
	Gregory	$ 3,250,000	$ 250,000	$ 2,000,000	25,000
	Alfredo	$ 2,500,000	$ 250,000	$ 1,500,000	12,000
Solution:
The fair value paid ($6 million in cash and $3.5 million in stock)
Notes payable			$ 10,000,000
Interest payable			$ 450,000
Cash				$ 6,000,000
Common stock				$ 100,000
Capital in excess of par				$ 3,400,000
Gain on settlement of debt				$ 950,000

Required

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