Equipment with a Fair Value of $65,000 and a Cost

question 35

Short Answer

Equipment with a fair value of $65,000 and a cost basis of $60,000 is transferred to a creditor in partial settlement of a debt of $150,000 plus accrued interest of $7,500.The balance of the debt will be satisfied by 3 equal payments of $30,000 over the next three years.Which of the following journal entries best records the restructure?
a.
$\begin{array}{lrr}\text { Loan Payable } & 150,000 & \\\text { Interest Payable } & 7,500 & \\\text { Equipment } & & 60,000 \\\text { Restructured Debt } & & 90,000 \\\text { Gain on Restructure } && 7,500\end{array}$

b.
$\begin{array}{lrr}\text { Loan Payable } & 150,000 & \\\text { Loss on Restructure } & 5,000 & \\\text { Equipment } & & 60,000 \\\text { Gain on Transfer of Equipment } && 5,000 \\\text { Restructured Debt } && 90,000\end{array}$

c.
$\begin{array}{lrr}\text { Loan Payable } & 150,000 & \\\text { Interest Payable } & 7,500 & \\\quad \text { Equipment } & & 60,000 \\\text { Gain on Transfer of Equipment } && 5,000 \\\text { Restructured Debt } && 90,000 \\\text { Gain on Restructure } && 2.500\end{array}$

d.
$\begin{array}{lrr}\text { Loan Payable } & 150,000 & \\\text { Interest Payable } & 7,500 & \\\quad \text { Equipment } & & 65,000\end{array}$

Recognize the impact of stress on immune system functioning and vulnerability to infections.

Identify psychophysiological illnesses and appropriate treatments.

Describe gender differences in immune system strength and susceptibility to autoimmune diseases.

Understand the relationship between emotional states and heart disease.

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Definitions:

Office Supplies

Items and materials used in offices for the purpose of maintaining or improving the efficiency and productivity of operations.

Cost Feasibility

An analysis to determine if the financial aspects of a project or plan are viable and sustainable.

Monetary Costs

The explicit costs associated with a transaction, investment, or activity, usually quantifiable in terms of money.

Cost Effectiveness Analysis

A method of evaluating the efficiency and economic impact of different options by comparing their costs and effects, commonly used in healthcare decisions.