Question: Cary is experiencing cash flow problems during the current year. Rather than foreclose an $80,000 business loan, his bank agrees to reduce the debt to

Cary is experiencing cash flow problems during the current year. Rather than foreclose an $80,000 business loan, his bank agrees to reduce the debt to $50,000. Prior to the debt reduction, Cary's total assets were $500,000 and his total liabilities were $510,000. How much income must Cary recognize from the reduction of his bank loan?

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