Find what is gain on the derecognition of note payable

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Reference no: EM132700712

On january 1 20x1 an entity has oustanding note payable with carrying amount of P 1000 000. 1. On this date, the debtor agrees to receive equipment with historical cost of 1,800,000, accumulated depreciation of P 900,000 and fair Value of P 850,000 in full settlement of the note payable.

On this day, the debtor agrees to receive 10 000 shares of the entity with par value per share of P10 in full settlement of the note payable. the shares are currently selling at P75 per shares.

Requirements:

Question a. What is the gain or loss on the derecognition of the note payable.

Question b. What is the entry to record the decognition of the note payable.

Reference no: EM132700712

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