Rochelle Co. owes $199,800 to Simmons Inc. The debt is a 10-year, 11% note. Because Rochelle Co.

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Rochelle Co. owes $199,800 to Simmons Inc. The debt is a 10-year, 11% note. Because Rochelle Co. is in financial trouble, Simmons Inc. agrees to accept some land and cancel the entire debt. The land has a book value of $90,000 and a fair value of $140,000. Prepare the journal entry on Rochelle books for debt settlement.

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