Problem $13-38($Algo$)($LO $13-10)$

The Larisa Company is exiting bankruptcy reorganization with the following account balances:

$\backslash$begin$\{$tabular$\}\{$lrr$\}$

& Net Book Value & Fair Value $\backslash \backslash$

Receivables & $\backslash (\backslash$$ $101,000\backslash )$ & $\backslash (\backslash$$ $132,000\backslash )\backslash \backslash$

Inventory & $221,000$ & $252,000\backslash \backslash$

Buildings & $321,000$ & $442,000\backslash \backslash$

Liabilities & $821,000$ & $821,000\backslash \backslash$

Common stock & $151,000$ & $\backslash \backslash$

Additional paid$-$in capital & $62,000$ & $\backslash \backslash$

Retained earnings $($deficit$)$ & $\backslash ((391,000)\backslash )$ &

$\backslash$end$\{$tabular$\}$

Larisa Company's assets have a $\backslash (\backslash$$ $871,000\backslash )$ reorganization value. As part of the reorganization plan, the company's owners transferred $80$ percent of the outstanding stock to the creditors in exchange for a $\backslash (\backslash$$ $500,000\backslash )$ reduction in the liabilities.

Required:

Prepare the journal entry $($or entries$)$ necessary to adjust the company's records to fresh start accounting.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Answer is not complete.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline No & Transaction & $\backslash$multicolumn$\{2\}\{|$c$|\}\{$General Journal$\}$ & Debit & Credit $\backslash \backslash$

$\backslash$hline A & $1$ & Receivables & $($ & $31,000$ & $\backslash \backslash$

$\backslash$hline & & Inventory & $($ & $31,000$ & $\backslash \backslash$

$\backslash$hline & & Buildings & $($ & $121,000$ & $\backslash \backslash$

$\backslash$hline & & Goodwill & $(>)$ & $45,000$ & $\backslash \backslash$

$\backslash$hline & & Additional paid$-$in capital & $*$ & $\backslash (163,000\backslash$times $\backslash )$ & $\backslash \backslash$

$\backslash$hline & & Retained earnings & $\backslash (\backslash$checkmark $\backslash )$ & & $391,000\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$