The following account balances are available from the ledger of Yutao Shui Corporation on December 31, 2019: 

Common Shares (20,000 shares authorized and outstanding) .........................$1,000,000 

Retained Earnings (Deficit).........................................................................................(190,000) 

On January 2, 2020, the corporation put into effect a shareholder-approved reorganization by agreeing to pass the common shares over to the creditors in full payment of the $260,000 Notes Payable, writing up Buildings by $135,600, and eliminating the deficit. Assume that Yutao Shui follows ASPE. 

Instructions 

Prepare the required journal entries for the financial reorganization of Yutao Shui Corporation.