Please solve the problem correctly and show work. Thank you Subject: ACC $203$ Ch $13$: Homework

Question $9$ of $9$

$\frac{-}{12}$

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Waterway Company owes $$208,000$ plus $$18,700$ of accrued interest to Wildhorse State Bank. The debt is a $10-$year, $10\%$ note. During $2025,$ Waterway's business deteriorated due to a faltering regional economy. On December $31,2025,$ Wildhorse State Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $$405,000,$ accumulated depreciation of $$222,750,$ and a fair value of $$187,000.$

$($a$)$

Prepare journal entries for Waterway Company and Wildhorse State Bank to record this debt settlement. $($If no entry is required, select $"$No Entry" for the account titles and enter $0$ 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$.$ Date Account Titles and Explanation

Debit

Credit

Waterway$\_$Company$($Debtor$)$:

December

Wildhorse State Bank $($Creditor$)$:

December