NOTES PAYABLE

Question 1

What is formula for amortization of Loan?

Answer 1

Loan Carrying Amount x Interest (# of months)= Interest. Payment made minus Interest= Principal on payment balance. Carrying amount minus Principal on payment= ending liability balance. (NOTES PAYABLE QUES# 1421)

Question 2

Gain on troubled debt restructuring ?

Answer 2

(Principal+Accrued Interest)-(Restructured Prin+Required Interest= Gain on troubled debt)
HINT:
Draw out JE
DR Note Payable 50,000
DR Accrued Interest 40,000
CR GAIN 60,000
CR Interest Payable 30,000 (Required Int. pay)