Reference no: EM131001261
Rothschild Chair Company, Inc., was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2005, and was due December 31, 2014. Annual interest was last paid on December 31, 2009. At January 1, 2011, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement.
Required:
Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below:
1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair Company's books at $13 million.
2. First Lincoln Bank agreed to
(a) Forgive the interest accrued from last year,
(b) Reduce the remaining four interest payments to $1 million each, and
(c) Reduce the principal to $15 million.
3. First Lincoln Bank agreed to defer all payments (including accrued interest) until the maturity date and accept $27,775,000 at that time in settlement of the debt.
Redraw two budget lines-substitution and income effects
: Hillary spends all her income on milk and cookies. Graph Hillary's budget line when income = $20, Pcookies= $1 & Pmilk= $2. Pick some point in the middle as her optimal choice and draw in the appropriate indifference curve. Redraw the two budget line..
|
Discuss the ethical considerations in this line of research
: Discuss the advantages and limitations of replication in the tobacco industry's use of research. Discuss the ethical considerations in this line of research
|
Evaluates consumption streams
: Consider a two-period economy with a single commodity (say leisure): x_1 is the consumption of leisure in period 1, and x_2 is the consumption of leisure in period 2. When Peter evaluates consumption streams, he cares only about the best time in his ..
|
Regarding quality or duration of goods future performance
: Mei issues purchase order to June for goods which costs $ 25,000. June agrees to provide the same but she doesn't sign the purchase order. Mei can file a suit for the breach of contract. A description that gives rise to an express warranty under whic..
|
Reduce the remaining four interest payments
: First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair Company's books at $13 million.
|
Mercedes was purchased by making a loan
: Joe Showoff bought a Mercedes when he came to Tech as an engineering student (so that his feet would not get cold on the way to those early morning classes). The Mercedes was purchased by making a loan that was to be paid off in 20 equal, quarterly p..
|
Compute the average total cost-average variable cost
: Compute the average total cost, average variable cost, and marginal cost of producing 60 to 72 haircuts. Draw the graph of the three curves between 60 and 72 haircuts.
|
Does this mean that he is totally deficient in reward power
: A project manager finds that he does not have direct reward power over salaries, bonuses, work assignments, or project funding for members of the project team with whom he interfaces. Does this mean that he is totally deficient in reward power?
|
Economy production is characterized by neoclassical function
: In an economy production is characterized by the neoclassical function =K.5N.5. Suppose it has a saving rate of .1, a population growth rate of .02, and an average depreciation rate of .03. At the steady-state value of k, is there more or less capita..
|