[Solved] Brewer Inc

Question 116
Multiple Choice

Brewer Inc.is owed $200,000 by Carol Co.under a 10% note with two years remaining to maturity.Due to financial difficulties Carol Co.did not pay the prior year's interest.Brewer agrees to settle the receivable (and accrued interest)in exchange for a cash payment of $150,000.The journal entry that Brewer would make to record this transaction would include a loss on troubled debt restructuring of:

A)$0.
B)$20,000.
C)$50,000.
D)$70,000.

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