How important is this topic. Feel like Iβm learning a new language
I have trouble understanding why the $40,000 in this example is not subtracted since it says it was forgiven?
"In Year 1, May Corp. acquired land by paying $75,000 down and signing a note with a maturity value of $1,000,000. On the note's due date, December 31, Year 6, May owed $40,000 of accrued interest and $1,000,000 principal on the note. May was in financial difficulty and was unable to make any payments. This situation was unusual and infrequent for May Corp., and is considered material. May and the bank agreed to amend the note as follows:
- The $40,000 of interest due on December 31, Year 6, was forgiven.
- The principal of the note was reduced from $1,000,000 to $950,000 and the maturity date extended 1 year to December 31, Year 7.
- May would be required to make one interest payment totaling $30,000 on December 31, Year 7."
As a result of the troubled debt restructuring, May should report a gain, before taxes, in its Year 6 income statement of:
The answer is $60,000.
https://fusion.inquirer.com/business/retail/preit-svp-bankruptcy-chapter-11-pre-packaged-restructuring-strategic-value-distressed-debt-20201125.html
The main holdout against mall-owner PREITβs plan to restructure its debt burden has dropped its objection to the proposal, opening a likely path for the dealβs approval.
Strategic Value Partners, an investment firm that specializes in distressed debt, said in a filing late last week, with U.S. Bankruptcy Court in Wilmington, Del., that it would not oppose the plan, which frees up as much as $150 million in new borrowing by PREIT and gives the company more time to pay back its existing loans.
Pennsylvania Real Estate Investment Trust, as PREIT is formally known, is scheduled to ask Judge Karen B. Owens to approve the proposal at a hearing on Nov. 30.
The hearing had been originally set for this week, but was postponed to complete paperwork.
On February 1, Year 1, Davis Corp. issued 12%, $1,000,000 face amount, 10-year bonds for $1,117,000. Davis reacquired all of these bonds at 102, plus accrued interest, on May 1, Year 4 and retired them. This type of transaction is considered a normal part of risk management for Davis Corp. Unamortized bond premium on that date was $78,000. What was Davis' gain on the bond retirement?
A. $97,000 B. $58,000 C. $39,000 D. $19,000
Answer : B: 58k , my problem is that , the gain should have been 68000 since he retired them 1MONTH after the last interest payment date, thus the accrual of the interest need to be added to the calculation , it said that "reacquired at 102 , PLUS accrued interest (means he have to pay for this as well other than the 1.02 cost right ?)
if it said INCLUDING , or included , i would understand , but thats not the case , is it me or this is just a poorly worded mcq?
Going through my last Becker section and came across this question. I found some responses on another71's forum, but I'm still a little confused about reporting the gains here:
Ace Corp. entered into a troubled debt restructuring agreement with National Bank. National agreed to accept land with a carrying amount of $75,000 and a fair value of $100,000 in exchange for a note with a carrying amount of $150,000. Disregarding income taxes, what amount should Ace report as a gain on its income statement?
$50,000
This answer is correct. The gain on restructuring the debt would be the difference between the carrying amount of the note received and the FMV of the land given. The amount that Ace should report as gain in its income statement is
$150,000 CV of note β 100,000 FMV of land $ 50,000 Gain on restructuring the debt
Isn't the Gain from marking the asset to FV reported in the I/S as well? I'm not seeing why the answer is 50,000 instead of 75,000. In other questions it specifically asks for the "Ordinary Gain (FV Gain)", or the "Restructuring Gain", but in this question it just asks for the "Gain reported in the I/S" which made me think to include both gains for a 75,000 Ξ£. Will CPA Exam questions be more specific?
Thank you
Used my Eastwest credit card to purchase cryptocurrency in Binance upon guidance of someone I met last year. Unfortunately, it was too late when I realized that the trading platform exchange to which I transferred the funds to was a scam. It demanded further deposits (i.e for tax, for identity verification fee) before it would release my original funds. Per checking in crypto threads, I was a victim of a scam. Now, I have no way of getting my money back.
Would the bank consider me for a debt restructuring or even internal debt restructuring program (IRDP) if I have the said kind of expense in my card? My card is maxed out and I am in a tough position to pay right now.
I know I am dumb for what I did, but would appreciate any kind advice or insights. Thank you.
Following a review of its financial resources, there can be no guarantee that the group has sufficient funds to meet its financial obligations, the company announced late Friday night. The government of China's Guangdong province, where Evergrande is headquartered, also said Friday it had dispatched a task force to the group to "mitigate risks and protect the interests of all parties involved." Xu Jiayin, Evergrande's chief executive, had been asked to talk by authorities, it said.
China's stock market regulator sought to allay fears of a spreading crisis. The impact of Evergrande's operations was controllable, the authority said in a statement. Analysts believed the authorities' concerted efforts were a signal that Evergrande had already entered a debt restructuring process. In doing so, the authorities were trying to ensure that Evergrande's current projects would be completed and that funding would continue to be available for construction work, Morgan Stanley experts said.
Evergrande has been in deep crisis for months and is considered the world's most indebted real estate company. It urgently needs to raise money to pay banks, suppliers and bondholders on time. The group is so large that some experts fear a "contagion risk" for China's economy and beyond. Further interest payments on bonds will fall due in the coming weeks and months.
Evergrande shares plunged 20 percent to a record low of 1.82 Hong Kong dollars in Hong Kong on Monday. "China Evergrande is again high on the agenda of stock market players," said portfolio manager Thomas Altmann of wealth adviser QC Partners. Investors fear insolvency could spark a conflagration and destabilize the entire Chinese financial market.
"All indications are that stock market investors should prepare for a debt restructuring or an orderly liquidation," said portfolio manager Altmann. The government in Beijing has no interest in a disorderly insolvency, he added. Market analyst Jochen Stanzl of online broker CMC Markets was less sanguine. "Even though the government in Beijing has always managed amazingly well in the last two decades to manage bursting speculative bubbles in the real estate market and their consequences without contagion effects for the global economy, it is not said that it will succeed this time as well."
Rating agencies such as S&P and Fitch had slashed their credit ratings for Evergrande in recent weeks because they consider the risk of a bond default to be very high. Evergrande h
... keep reading on reddit β‘Saudara gw ada yg tiba2 nelpon mau pinjem duit 10juta krn dikejar2 debt collector. Dia ada cicilan mobil di Mandiri Finance 2.8jt/bulan, tinggal 9 bulan lagi. Mobilnya dipakai buat ngegrab jd kalau disita jd ga bisa kerja.
Katanya blm bayar cicilan dr bulan September & Oktober. Setahu gw, debt collector itu baru mulai nyari klo telat bayarnya udah lbh dr 60 hari bener ga?
Saudara gw ini buka katering di rumahnya, suaminya ngegrab car. Anaknya 4 masih kecil2. Secara finansial memang menengah ke bawah dgn pemasukan yg nggak tetap tiap bulan.
Gw ga mau sekedar ngasih pinjeman, tp pengen ngebantu dia mengelola utangnya supaya bisa lunas.
Di sini ada yg pny pengalaman debt restructuring/rescheduling? Ada tips?
Thanks!
