Amanda Corp

question 132

Essay

Amanda Corp.owned a major business building in a small Canadian city.The building has a
$1,555,000 mortgage that is held by a Canadian financial institution (FI).Amanda Corp.has had recent cash flow problems, in part, due to the low vacancy rates in the business buildings.Interest is 15 months in arrears and totals $132,000.After discussions with the FI, they agree to a financial reorganization in that they accept $50 preferred shares at a value of $1,490,000, retractable in 15 yea time at book value.The shares have first claim on the proceeds of the business building, should it be sold.
Required:
Prepare the journal entry to record the exchange.

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Definitions:

Impeached

The process by which a public official is accused of unlawful activity, possibly leading to the removal from office depending on the outcome of a trial.

Resign

To voluntarily leave a position or office, often as a personal decision.

Concurring Opinion

A concurring opinion is a legal document written by a judge or justice who agrees with the conclusion of the majority in a case but for different reasons.

Majority Opinion

The judicial opinion agreed to by more than half of the members of a court, setting forth the decision of the court.