DeFunk Corporation Is Being Liquidated Under Chapter 7 of the Bankruptcy

question 37

Essay

DeFunk Corporation is being liquidated under Chapter 7 of the Bankruptcy Act.The trustee has determined that the unsecured claims will receive $.18 on the dollar.Magma Corporation holds a $200,000 mortgage receivable from DeFunk that is secured by the land and buildings with a book value of $180,000 and a fair value of $190,000.Magma also holds an $80,000 unsecured note receivable from Defunk.Mortgage interest owed,which is secured with the mortgage note,is $4,000.Note interest owed,which is unsecured,is $2,000.
Required:
How much of the amounts owed will Magma recover?

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Definitions:

Systematic Desensitization

A therapeutic technique aimed at reducing fear or anxiety through gradual exposure to the feared object or situation in a controlled way.

Schizophrenia

A psychiatric disorder characterized by delusions, hallucinations, disorganized speech, and impaired cognitive abilities.

Gradually

A progression in small stages or degrees over time.

Exposure

Refers to the state of being subjected to contact with something (e.g., a new environment, a language, or a type of learning material), often leading to increased familiarity or acquiring new skills.