Flashcards in 13 C Wrong Answers Deck (6):
When calculating the present values of future cash flows of a restructured note, what is used for rate, Current effective rate of interest or annual interest rate?
Annual interest rate
What is the journal entry for the creditor restructuring the loan?
Bad debt exp. Xxx
Loan receivable. Xxx
Interest receivable. Xxx
Valuation allowance for loan impairment Xxx
What is the journal entry for the creditor of an interest payment received after a loan restructuring?
Valuation allowance for loan impairment xxx
Interest income. Xxx
What is the creditors entry to record receipt of cash for note receivable in final year?
Notes receivable Xxx
What is the debtors journal entry to record restructuring of the loan?
Notes payable. Xxx
Interest payable. Xxx
Gain on restructuring Xxx
Note payable. Xxx