C$.$ Mann, Inc., which owes Doran Co$.$ $$1,200,000$ in notes payable with accrued interest of $$108,000,$ is in financial difficulty. To settle the debt, Doran agrees to accept from Mann equipment with a fair value of $$1,140,000,$ an original cost of $$1,680,000,$ and accumulated

depreciation of $$390,000.$

Instructions

$($a$)$ Compute the gain or loss to Mann on the settlement of the debt.

$($b$)$ Compute the gain or loss to Mann on the transfer of the equipment.

$($c$)$ Prepare the journal entry on Mann's books to record the settlement of this debt.

$($d$)$ Prepare the journal entry on Doran's books to record the settlement of the receivable.