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Determine the Gain on debt restructuring

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Reference no: EM133077041

Question - Masisay Company is unable to meet interest payments and fund requirements to retire its P1,500,000 bonds payable. Accrued interest on the bonds amounted to P150,000. The bonds are held by Easy Financing, Inc.. In order to prevent bankruptcy, Masisay Company entered into an agreement with Easy Financing, Inc. to exchange equity securities for the debt. Masisay Company is issuing 20,000 shares of its P50 par value ordinary shares. The ordinary share is currently selling at P65. Determine the Gain on debt restructuring?

a. P650,000

b. P350,000

c. P250,000

d. P0

Reference no: EM133077041

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