The creditors of Chan Ho Ltd. agree to accept promissory notes for the amount of its indebtedness

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The creditors of Chan Ho Ltd. agree to accept promissory notes for the amount of its indebtedness with a condition that two-thirds of the annual profits must be applied to their liquidation. How should these notes be reported on the statement of financial position of the issuing company? Give a reason for your answer.
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Intermediate Accounting IFRS

ISBN: 978-1119372936

3rd edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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