Problem:
As part of a Type A reorganization, a creditor swaps an old bond with a basis of $700 and a principal of $1000 for a new convertible bond with a value of $750 and a principal of $1,200. The low value is due to the lack of security and low coupon rate. What is the bondholder's realized and recognized gain on the reorganization? What is the basis in the convertible bond?