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Prepare the journal entry on Sage books for debt restructure

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Reference no: EM132872200

Question - Headland Co. owes $218,200 to Sage Inc. The debt is a 10-year, 11% note. Because Headland Co. is in financial trouble, Sage Inc. agrees to accept some land and cancel the entire debt. The property has a book value of $84,900 and a fair value of $127,000.

Required -

(a) Prepare the journal entry on Headland's books for debt restructure.

(b) Prepare the journal entry on Sage's books for debt restructure.

Reference no: EM132872200

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