1. Sounds good.
2. This sounds good: "Reducing that officer's deferred compensation from Liability Balance Sheet Side 30K against 30K for extraordinary gains under Other Income. Company was already in loss let say 50K before and now it would be overall 20K loss."
Make sure I understand this (sorry): "The remaining 10 K difference from 40K loss - 30 K deferred reversal will be adjusted as accounts receivable from the Officer personal in Balance sheet Asset side?".... I get the loss was 40K from the officer then, not 30K, in which case there is an additional 10K officer receivable that will appear on the balance sheet after writing off the 30K payable, yes. Here is the entry in that case:
Liability debit for 30K
Receivable debit for 10K
Other income credit for 40K
Overall change in income = 40K
Overall change in income for tax purposes = 10K
Again, this is because deferred compensation expense is generally deducted when paid, not accrued, for tax purposes. You most likely had no deduction in the past when you put the 30K deferred comp liability on the balance sheet (book/tax difference). The 10K, above and beyond the deferred compensation liability, would have to be recognized as income. Essentially, the deferred compensation is getting paid and remitted to the company, not canceled per se. There is the 30K deduction for paying the deferred comp and the 30K in income from the officer that will wash, hence creating the 10K left over.
If you have a set of financials that are being reported on then by an external CPA, they'll help you classify this on an income statement before they sign the report (I would personally look more closely into whether I would describe this as other income, or extraordinary income, if signing the report). For your internal purposes or working with your CPA, you know plenty now...