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Ashley had $10,000 in credit card debt. She negotiated a settlement with the credit card company,...

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Accounting

Ashley had $10,000 in credit card debt. She negotiated asettlement with the credit card company, and the credit cardcompany agreed to cancel $6,000 of the debt.

If Ashley has total assets of $25,000 and total liabilities of$50,000 at the time the debt was cancelled, what amount of grossincome does Ashley have as a result of the credit card companycancelling $6,000 of her debt?

Answer & Explanation Solved by verified expert
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It is to be noted that the tax law considers most forgiven debt as income If the lending institution forgives at least 600 worth of the principal on the customers debt it must report    See Answer
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Ashley had $10,000 in credit card debt. She negotiated asettlement with the credit card company, and the credit cardcompany agreed to cancel $6,000 of the debt.If Ashley has total assets of $25,000 and total liabilities of$50,000 at the time the debt was cancelled, what amount of grossincome does Ashley have as a result of the credit card companycancelling $6,000 of her debt?

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