Recording restructuring transactions. St. John Corporation is barely solvent and has been seeking an equity investor that would be interested in making a capital contribution so that the company would...

Recording restructuring transactions. St. John Corporation is barely solvent and has been seeking an equity investor that would be interested in making a capital contribution so that the company would hopefully return to performance levels it had experienced in the past. At the end of the prior year, the company’s balance sheet was as follows:

Selected transactions occurring during the first six months of the current year were as follows:

a. Patents with a fair value of $230,000 were transferred to the officer in partial satisfaction of their note. The remaining balance on the note would be paid over five quarters with the first payment of $35,026.77 due on June 30 of the current year.

b. The mortgage payable was restructured with 40 quarterly payments of $51,178.05, beginning on June 30 of the current year, in addition to an immediate lump sum payment of $100,000.