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kolbaska11 [484]
3 years ago
5

At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $28 million under a 10% note due December 31, 2023. Interest

was paid last on December 31, 2019. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to:Forgive the interest accrued for the year just ended.Reduce the remaining two years’ interest payments to $2 million each and delay the first payment until December 31, 2022.Reduce the unpaid principal amount to $20 million.Required:Prepare the journal entries by Brainard Industries, Inc., necessitated by the restructuring of the debt at (1) January 1, 2021; (2) December 31, 2022; and (3) December 31, 2023.
Business
1 answer:
sammy [17]3 years ago
5 0

Answer:

note payable      8,000,000 debit

interest payable 2,800,000 debit

     gain on troubled debt restructuring  10,800,000 credit

--Jan 1st 2021--

interest expense  2,000,000 debit

     interest payable    2,000,000 credit

--Dec 31th 2022--

interest expense  2,000,000 debit

     interest payable    2,000,000 credit

--Dec 31th 2023--

note payable 20,000,000 debit

            cash          20,000,000 credit

--Dec 31th 2023--

Explanation:

28,000,000  // principal

<u>+ 2,800,000</u> // 2020 Dec 31th interest payable

30,800,000

<em><u>after negotiation:</u></em>

2,800,000 interest expense forgiven.

interest payment decrease to 2,000,000 from 2,800,000

Then, principal reduced to 20,000,000 from 28,000,000

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VashaNatasha [74]

Answer:

The value of a right is $1

Explanation:

10 rights are needed to buy 1 share at the price of $19

Value of total rights = $29 - $19 =$10

Value of a right = \frac{10}{10} = $1

4 0
3 years ago
There are three rooms. The first one is filled with very important papers. The second one is filled with money. The third one is
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8 0
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coldgirl [10]

Explanation:

Autonomy -

It is refers to the degree to which the workers have the freedom , discretion , independence , so as to decide when and how to accomplish their jobs .

Hence , from the options given in the question ,

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7 0
3 years ago
If productivity increases significantly and demand is not very elastic, what is likely to happen?
spayn [35]

Answer:

B. Fewer workers will be needed.

Explanation:

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An increase in productivity means an increase in output per worker. It is the increase in the number of units produced, per hour, per worker. An increase in productivity results in more output in a given period than previously.

If the demand is constant and there is an increase in productivity, only a few workers will be required. The output from the few workers will be high to meet the constant demand.

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Answer:

An economic union

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II. Free trade area

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IV. Political union

VI. Economic union

An economic union can be defined as a trade bloc which comprises of both customs union and a common market.

In a common market, there are free movement of the factors of production and no barrier to trade between member countries. Also, a common market establishes a common external trade policy for non-member countries.

However, an economic union entails even closer economic integration and cooperation among member countries than a common market because it combines customs union and a common market.

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