Create the relevant journal entries for borrower inc

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At January 1, 2021, Borrower, Inc., was indebted to Lender Bank under a $600,000, 9% unsecured note. The note was signed January1, 2016, and was due December 31, 2023. Annual interest was last paid on December 31, 2019. Borrower was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement.

a. Assume that Lender Bank agreed to accept a piece of property owned by Borrower, Inc. in full settlement of the obligation. The property has a fair market value of $800,000. Borrower Inc. had paid $670,000 for the property 5 years ago.

Required:

Problem 1: Create the relevant journal entries for Borrower, Inc. to record this restructuring agreement.

Reference no: EM132687899

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