Question: Marin Co . owes $ 1 9 9 , 8 0 0 to Headland Inc. The debt is a 1 0 - year, 1 1

Marin Co. owes $199,800 to Headland Inc. The debt is a 10-year, 11% note. Because Marin Co. is in financial trouble, Headland Inc.
agrees to accept some land and cancel the entire debt. The property has a book value of $95,600 and a fair value of $152,500.
a. Prepare the journal entry on Marin's books for debt restructure.
b. Prepare the journal entry on Headland's books for debt restructure.
(If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented
when the amount is entered. Do not indent manually. List all debit entries before credit entries.)
No. Account Titles and Explanation
Debit
Credit
a. Marin Co.'s entry:
199800
Interest Payable
Accumulated Depreciation-Machinery
b. Headland Inc. entry:
Marin Co. owes $199,800 to Headland Inc. The debt is a

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