Which of the following is true for accounting for a troubled debt restructuring by a modification of terms by the debtor?
A) If undiscounted cash flows after restructuring are greater than carrying value of the debt before restructuring, recognize a gain.
B) If undiscouraged cash flows after restructuring are greater than carrying value of the debt before restructuring, recognize no gain and impute new interest rate.
C) If present value of cash flows after restructuring is greater than carrying value of the debt before restructuring, recognize a gain.
D) If undiscouraged cash flows after restructuring are less than carrying value of the debt before restructuring, recognize NO gain and impute new interest rate.
Correct Answer:
Verified
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