Determine the gain on debt restructuring

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Question - Calulut Company has outstanding P950,000 note payable to Brad Finance Corporation. Because of financial difficulties, Calulut Company negotiates with Brad Finance to exchange inventory of machine parts to satisfy the debt. The cost of the machine parts inventory transferred is carried in Calulut Company's books at P610.000. The estimated sales price of these inventory items is P835,000. Determine the Gain on debt restructuring?

a. P340,000

b. P225,000

c. P115,000

d. P0

Reference no: EM133094735

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