Multiple Choice
On December 31, 2010, Martha Ltd.owes Stewart Corp.$50, 000 on a 10% note payable.Two years of interest is also unpaid and due.Martha cannot pay off the debt.Stewart agrees to reduce the principal amount to $30, 000, extend the due date to December 31, 2013, and reduce the interest rate to 5% per year for the extended period.What amount of gain on restructuring should Martha record?
A) $25, 500
B) $21, 000
C) $20, 000
D) $11, 000
Correct Answer:
Verified
Correct Answer:
Verified
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