What is the amount of restructuring gain or loss to Corona

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Question - Corona Industries purchased a stamping machine on January 2, 20X1, for $100,000. It made an initial payment of $20,000 and financed the balance over 5 years at State Bank. The loan terms were for annual payments of $16,000 plus 10% interest, payable on December 31 each year. The year 20X4 proves to be a difficult year and on December 1, 20X4 Corona negotiates a debt restructuring with State Bank. The settlement calls for cash payment of accrued interest plus $4,000 on December 1 and the transfer of 200 acres of land held by Corona that cost $15,000. The land has a current fair value of $22,000. What is the amount of the restructuring gain or loss to Corona?

a. $6,000 loss

b. $6,000 gain

c. $8,933 loss

d. $13,000 gain

Reference no: EM132795244

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