What the gain on restructuring on December

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Problem - Due to the adverse economic circumstances and poor management, AAA Company has negotiated a restructuring of its P5,000,000 note payable to BBB Bank. BBB Bank agreed to reduce the face value of the note from P5,000,000 to P4,000,000, reduce the interest rate from 15% to 10% and extend the due date three years from the date of restructuring. The restructuring will occur on December 31, 2020, the last day of AAA's annual reporting period. The unpaid interest on the restructured loan at this time is P750,000. (Round off PV Factor to two decimal places) What the gain on restructuring on December 31, 2020?

Reference no: EM132916198

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