eBook Question Content Area Troubled Debt Restructuring (Appendix 14.1) Pamlico Company has a $500,000, 15%, 3-year note dated January 1, Year 1, payable to Forest National Bank. On December 31, Year 2, the bank agreed to settle the note and unpaid interest of $75,000 for $50,000 cash and marketable securities having a current market value of $375,000. Pamlico's acquisition cost of the securities is $385,000. Ignoring income taxes, what amount should Pamlico report as a gain from the debt restructuring on its Year 2 income statement? a. $65,000 b. $140,000 c. $150,000 d. $75,000