On December 31, 2025, Kootenay Co. is in financial difficult…
On December 31, 2025, Kootenay Co. is in financial difficulty and cannot pay a note due that day. It is a $3,000,000 note payable to Jasper, Inc. Jasper agrees to accept from Kootenay equipment that has a fair value of $1,450,000, an original cost of $2,400,000, and accumulated depreciation of $1,150,000. Calculate the gain that Kootenay should recognize on the settlement of debt (excluding the asset disposal):