Question: Simonies Company, which uses iGAAP, has a note receivable with a carrying value of $30,000 at December 31, 2010. On January 2, 2011, the borrower

Simonies Company, which uses iGAAP, has a note receivable with a carrying value of $30,000 at December 31, 2010. On January 2, 2011, the borrower declares bankruptcy, and Simonis estimates that only $25,000 of the note will be collected. Prepare the journal entry to record this loss. Briefly describe the accounting for the loan subsequent to the bankruptcy, assuming Simonis estimates that more than $25,000 can be repaid.

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