Eatsy Corp

Multiple Choice

Eatsy Corp. owes Hardy, Inc., $30,000 on a note payable, plus $1,800 interest. Hardy agrees to accept 400 shares of Eatsy common stock in full settlement of the debt. Eatsy stock has a par value of $10 and a current market value of
$70 per share. As a result of the debt restructuring, Eatsy Corp. should record an

A) ordinary loss of $1,800.
B) extraordinary gain of $1,800.
C) ordinary gain of $3,800.
D) extraordinary gain of $3,800.