Refer to the note issued by Coldwell, Inc. in BE14-9. During 2015, Coldwell experiences financial difficulties. On January 1, 2016, Coldwell negotiates a settlement of the note by issuing to Flint Hills Bank 20,000 €1 par Coldwell ordinary shares. The ordinary shares have a market price of €4.75 per share on the date of the settlement. Prepare Coldwell’s entries to settle this note.

Data From BE 14-9

Coldwell, Inc. issued a €100,000, 4-year, 10% note at face value to Flint Hills Bank on January 1,2015, and received €100,000 cash. The note requires annual interest payments each December 31. Prepare Coldwell’s journal entries to record (a) the issuance of the note and (b) the December 31 interest
payment.