On December 31, 2019, GMC had a document payable with a value in the

$ 100,000 books. GMC has faced economic difficulties that have not

allowed to meet the payment of this debt. Suppose that on the date mentioned the

The bank agreed to change the terms of the loan as follows: the principal

(maturity value) was reduced to $ 80,000, the expiration date was changed to 31

December 2022, and the contractual interest rate was reduced from 15% to 10%. Determine the

effect of this restructuring of debt on the Net Income of

GMC on 12/31/19.

to. GMC is going to report a profit of $ 20,000.

b. GMC will report a profit equal to 5% of the principal.

c. GMC is going to report a profit of $ 4,000.

d. When the terms of the contract are adjusted, the debtor does NOT report earnings.