Elizabeth Corp

question 105

Essay

Elizabeth Corp.owned a major business building in a small Canadian city.The building has a
$1,345,000 mortgage that is held by a Canadian financial institution (FI).Elizabeth 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 $145,000.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 years 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:

Physical Punishment

The use of physical force with the intention of causing a child to experience pain, but not injury, for the purpose of correction or control.

Operant Behaviour

A type of learning where behavior is controlled by consequences (reinforcements or punishments).

Conditional Response

A learned response to a previously neutral stimulus that becomes conditioned through association with an unconditioned stimulus.

Primary Reinforcer

A stimulus that satisfies a biological need, inherently reinforcing without prior learning.