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How much gain on restructure will the company recognize

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Reference no: EM131808931

Problewm

On Dec 31. 2010, a company. has a $200,00 6% annual coupon bond outstanding that matures in three years. The bonds was issued when the prevailing rate of interest was 7%. On Dec 31, 2010, the company negotiates a restructure agreement with the bond holder. The face value (amount payable at maturity ) of the bonds is reduced to $170,000 and the annual interest payments are reduced to $9,000 each.

How much gain on restructure will the company recognize on Dec 31, 2010?

Reference no: EM131808931

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