Question: On 12/31/18 GMC had a document payable with a book value of $100,000. GMC has faced economic difficulties that have not allowed it to meet

a. Determine the effect of this debt restructuring (restructuring of debt) on the GMC Net Income as of 12/31/18.

Suppose that on 12/31/18, the bank agreed to change the terms of the loan in the following way: the principal (maturity value) was reduced to $80,000, the maturity date was changed from 12/31/18 to the 12/31/20, and the contractual interest rate was reduced from 15% to 10%.

b. Determine the effect of this debt restructuring (restructuring of debt) on the GMC Net Income as of 12/31/18.

I'll upload image in case that you guys see the problem incomplete.

On 12/31/18 GMC had a document payable with a book value of

On 12/31/18 GMC had a document payable with a book value of $100,000. GMC has faced economic difficulties that have not allowed it to meet the payment of this debt. Assume that on 12/31/18, the Bank agreed to accept land with a market value of $85,000 as a settlement of $100,000. This property had a value in the GMC books of S 75,000. a. Determine the effect of this debt restructuring (restructuring of debt) on the GMC Net Income as of 12/31/18 Suppose that on 12/31/18, the bank agreed to change the terms of the loan in the following way: the principal (maturity value) was reduced to $80,000, the maturity date was changed from 12/31/18 to the 12/31/20, and the contractual interest rate was reduced from 15% to 10%. b. Determine the effect of this debt restructuring (restructuring of debt) on the GMC Net Income as of 12/31/18

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