Blinder Corporation Was Having Some Cash Flow Problems

Multiple Choice

Blinder Corporation was having some cash flow problems.One of its creditors agreed to accept $25,000 in payment of a $40,000 debt to help the company out of the jam, even though it is not bankrupt.How does Blinder treat this debt repayment?

A) Blinder has neither income nor loss
B) Blinder must recognize $15,000 of income
C) Blinder must reduce the basis of assets by $15,000
D) Blinder must reduce tax attributes by $15,000