Years ago, February Frost Inc. ( FFI ) borrowed $ 6 7 5 , 0 0 0
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Question:
Years ago, February Frost Inc. FFI borrowed $ from Sweetheart Corporation Sweet in the form of a year, note due on December FFI has had declining sales in the last two years and has had trouble making their payroll in a timely manner in the currrent year.
It is December Since FFI is in financial trouble, Sweet has agreed to extend the maturity date of the not to December reduce the principal to $ and reduce the interest rate to payable annually on December When the original note was issued, it was issued at par. The current market rate is Both companies prepare their financial statements under IFRS.
a Is this a settlement of debt or a continuation of debt with midification of terms? show your work
b Prepare the journal entries that are required on FFI's books and financial records on December and
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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