Determine the increase in additional paid-in capital

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On January 1, 2020, a corporation is delinquent on a P3,000,000 note to a bank on which P300,000 of interest has accrued. On the same date, the corporation entered into a restructuring agreement with the bank to issue 100,000 P10 par shares of the corporation to settle the entire obligation.

  • At this date, the market value of the shares is P30 per share.

Problem 1: Determine the increase in additional paid-in capital due to the debt restructuring.

Group of answer choices

Option 1: 2,300,000

Option 2: 300,000

Option 3: 1,000,000

Option 4: 2,000,000

Reference no: EM132885543

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