POORS Company has an overdue note payable to BDA Bank of P9,000,000 and recorded accrued interest of P810,000. On December 31, 2020, BDA Bank agreed to the following restructuring agreement:

*Reduce the principal obligation by P1,000,000.
*Waive the P810,000 accrued interest.
*Extend the maturity date to December 31, 2020.
*Annual interest of 9% of the new principal is to be paid on December 31, 2021, December 31, 2022 and December 31, 2023.
*The prevailing market interest rate for similar debt instrument on the date of restructuring is 10%.

How much is the gain on debt restructuring? (round off PVF to 4 Decimal)

Answer rating: 100% (QA)

PV of Notes payable after reduction of 1000000 debt Interest p... View the full answer