Compute the amount of gain

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Reference no: EM13309508

Ludwig, Inc., which owes Giffin Co. $1,600,000 in notes payable, is in financial difficulty. To eliminate the debt, Giffin agrees to accept from Ludwig land having a fair value of $1,220,000 and a recorded cost of $900,000.

Instructions
(a) Compute the amount of gain or loss to Ludwig, Inc. on the transfer (disposition) of the land.
(b) Compute the amount of gain or loss to Ludwig, Inc. on the restructuring of the debt.
(c) Prepare the journal entry on Ludwig 's books to record the restructuring of this debt.
(d) Compute the gain or loss to Giffin Co. from restructuring of its receivable from Ludwig.
(e) Prepare the journal entry on Giffin's books to record the restructuring of this receivable.

Reference no: EM13309508

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