Your company is in financial trouble and is in the process of reorganization.

Your company is in financial trouble and is in the process of reorganization. Your managerwants to know how you will report on restructuring the debt. Use the following informationto help with this assignment.ASSETSCURRENT ASSETSCash and cash equivalentsTrade accounts receivable, net of allowancesOther receivablesOperating supplies, at lower of averagecost or marketPrepaid expenses$108,3402,866,26062,15058,630446,050Total Current Assets3,541,430PROPERTY, PLANT AND EQUIPMENT (at cost)LandBuildings and improvementsEquipment1,950,0002,327,4105,015,660Other equipment and leasehold improvementstotalAccumulated depreciation and amortizationNet Property, Plant, and Equipment1,645,58010,938,650-7,644,4303,294,220OTHER ASSETSDeposits and other assetsTOTAL ASSETS1,000,080$7,835,730LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)CURRENT LIABILITIESAccounts payableAccrued liabilitiesAccrued claims costsFederal and other income taxesDeferred income taxesCurrent maturities of long-term debt andcapital lease obligationsShort-term borrowingsTotal Current LiabilitiesLONG-TERM LIABILITIESCapital lease obligationNote OutstandingMortgage OutstandingOther liabilitiesTotal Long-term LiabilitiesTotal LiabilitiesSHAREHOLDERS’ EQUITY (DEFICIT)Common stock, $.01 par value; authorized500,000 shares; issued 231,000 sharesAdditional paid-in capitalAccumulated other comprehensive lossRetained earnings (deficit)Treasury stockTotal Shareholders’ Equity (Deficit)TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$972,1602,071,270793,62019,71050050,610249,2504,157,12054,5803,000,000608,03095,8603,758,4707,915,5902,310731,090-113,500-639,180-60,580-79,860$7,835,730As stipulated, your company is having financial difficulty and has asked the bank torestructure its $3 million note outstanding. The present note has 3 years remaining andpays a current interest rate of 10%. The present market rate for a loan of this nature is12%. The note was issued at its face value. The bank agrees to accept land in exchangefor relinquishing its claim on this note. The land has a book value of $1,950,000 and a fairvalue of $2,400,000.