Question: Casey Corp. entered into a troubled debt restructuring agreement with First State Bank. First State agreed to accept land with a carrying amount of $85,000

Casey Corp. entered into a troubled debt restructuring agreement with First State Bank. First State agreed to accept land with a carrying amount of $85,000 and a fair value of $120,000 in exchange for a note with a carrying amount of $185,000. What amount should Casey report as a gain from extinguishment of debt in its income statement?

a. $0

b. $ 35,000

c. $ 65,000

d. $100,000

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