Problem

Pumpkin Company is going through bankruptcy reorganization. It has a $200,000 note payable...

Pumpkin Company is going through bankruptcy reorganization. It has a $200,000 note payable incurred prior to the order for relief. The company believes that the note will be settled for $60,000 in cash. It is also possible that the creditor will instead take a piece of land that cost the company $50,000 but is worth $72,000. On a balance sheet during the reorganization period, how will this debt be reported?

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