Question: (Based on Appendix 7B) Marshall Companies, Inc., holds a note receivable from a former subsidiary. Due to financial difficulties, the former subsidiary has been unable

(Based on Appendix 7B) Marshall Companies, Inc., holds a note receivable from a former subsidiary. Due to financial difficulties, the former subsidiary has been unable to pay the previous year’s interest on the note. Marshall agreed to restructure the debt by both delaying and reducing remaining cash payments. The concessions result in a credit loss on the creditor’s investment in the receivable. How is the credit loss on the troubled debt restructuring calculated?

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