Under a Troubled Debt Restructuring That Results in a Modification

Multiple Choice

Under a troubled debt restructuring that results in a modification of terms the debtor will report interest expense when

A) The debtor reports a gain on restructuring.
B) The future cash flows under the restructuring agreement are less than the company's obligation at the date the restructuring takes place.
C) Always because the troubled debtor has a new agreement that obligates the company to make payments in the future.
D) The debtor reports no gain on restructuring.