Question Completion Status: 사 QUESTION 2 39 points Save Answer Problem 2: Reeves Supply Inc. filed for bankruptcy under

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Question Completion Status: 사 QUESTION 2 39 points Save Answer Problem 2: Reeves Supply Inc. filed for bankruptcy under Chapter 11 of the Bankruptcy code on June 30th, 2011. The company's liabilities and equity on June 30th, 2011 are as follows: Accounts Payable (Post-Petition) $ 20,000 Pre-petition Liabilities: Accounts Payable 100,000 Interest Payable 12,000 Bonds Payable 350,000 Equity: Common Stock, $1 Par Value Additional PIC Retained Earnings (deficit) 90,000 120,000 (177,000) The plan of reorganization stated the following: 1. $150,000 worth of Bonds Payable plus interest payable $12,000 were given Land with a book value of $90,000 in full settlement of their claim. The market value of Land is assessed to be $114,000. 2. The remining Bonds Payable agreed to accept a secured interest in the company's building in exchange for extending the term of bond for an additional year at no interest. 3. The accounts payable of $100,000 agreed to receive 53 cents in a dollar (53% of $100,000) in cash for full settlement. 4. The common stock holders agreed to change the par value of the shares from $1.00 to $1.50 by utilizing the balance in the Additional PIC account. Required: 1. Give journal entries for 1 and 4 above (only). [10+ 6] 2. What is the total balance in the gain on restructure account as a result of the above transactions? Show you calculations. [4] 3. Give one journal entry to close all the gains earned during reorganization to the retained earnings account. [6] 4. Give the journal entry to close the balance in the retained earnings to Additional PIC account. [4] 5. Prepare the owners' equity section of the balance sheet. [9] For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). в BI U S S Paragraph Arial 14px Click Save and Submit to save and submit. Click Save All Answers to save all answers. v : v v i Αν T no a od = = = = Save All Answers Close Window Save and Submit