13 C Wrong Answers

Question 0

What is the journal entry for the creditor restructuring the loan?

Answer 0

Bad debt exp. Xxx
Loan receivable. Xxx
Interest receivable. Xxx
Valuation allowance for loan impairment Xxx

Question 1

When calculating the present values of future cash flows of a restructured note, what is used for rate, Current effective rate of interest or annual interest rate?

Answer 1

Annual interest rate

Question 2

What is the journal entry for the creditor of an interest payment received after a loan restructuring?

Answer 2

Cash. Xxx
Valuation allowance for loan impairment xxx
Interest income. Xxx

Question 3

What is the creditors entry to record receipt of cash for note receivable in final year?

Answer 3

Cash. Xxx

Notes receivable Xxx

Question 4

What is the debtors journal entry to record restructuring of the loan?

Answer 4

Notes payable. Xxx
Interest payable. Xxx
Gain on restructuring Xxx
Note payable. Xxx

Question 5

What is the debtors journal entry to pay interest after debt restructuring?

Answer 5

Note payable. Xxx

Cash. Xxx