Question: Bar Company which is in financial difficulty and in the

Bar Company, which is in financial difficulty and in the process of a voluntary reorganization, has agreed to transfer to a creditor a copyright it owns in full settlement of a $150,000 note payable and $15,000 in accrued interest. The copyright, which originally cost $100,000, has an accumulated amortization balance of $55,000 and a current fair value of $95,000.

A. Prepare the journal entries on Bar Company’s books to record the transfer of the copyright.
B. Explain the proper treatment of any gain or loss recognized in (A).
C. Assuming the fair value of the copyright was $30,000, repeat the requirement in (A).

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  • CreatedMarch 13, 2015
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