Items 1 and 2 are based on the following:
The following information pertains to the transfer of real estate pursuant to a troubled debt restructuring by Knob Co. to Mene Corp. in full liquidation of Knob’s liability to Mene:
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Carrying amount of liability liquidated |
$150,000 |
|
Carrying amount of real estate transferred |
100,000 |
|
Fair value of real estate transferred |
90,000 |
What amount should Knob report as a gain (loss) on restructuring of payables?
- $(10,000)
- $0
- $50,000
- $60,000
What amount should Knob report as a gain (loss) on transfer of real estate?
- $(10,000)
- $0
- $50,000
- $60,000