Which of the following is true for accounting for a troubled debt restructuring by a modification of terms by the creditor?
A) Loss on restructuring is based on undiscounted repayment cash flows using the current market interest rate.
B) Loss on restructuring is based on undiscounted repayment cash flows using the contractual interest rate.
C) Loss on restructuring is based on present value of repayment cash flows using the current market interest rate.
D) Loss on restructuring is based on present value of repayment cash flows using the contractual interest rate.
Correct Answer:
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