In a Troubled Debt Restructuring in Which the Debt Is

question 1

Multiple Choice

In a troubled debt restructuring in which the debt is settled by a transfer of assets with a fair market value less the carrying amount of the debt, the debtor would

• A) not recognize a gain or loss on the settlement.
• B) recognize a gain on the settlement.
• C) recognize a loss on the settlement.
• D) only record a memo in the general ledger.

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