Harry Purchased Equipment For His Business And Gave The Seller Cash And A Note D

/in /by

Harry purchased equipment for his business and gave the seller cash and a note due in two years. Larry also purchased business equipment, but financed the transaction with a bank loan. Because Harry and Larry were financial difficulty, the creditors reduced the balance due on each mortgage by $50,000. What are the tax effects of the debt adjustments experienced by Harry and Larry?