Sharon owes Lawrence Co. $15,000 on a note payable, plus %3,000 of unpaid interest. Lawrence agrees to accept equipment in full settlement of the debt. The equipment is recorded on Sharon's books as $12,000, and it is currently worth $14,200. What types and amount of gains or losses, if any, should be recorded by Sharon on this troubled debt restructuring?

Is it Gain on Debt Restructure, $3,8000; Gain on Disposal of Equipment, $2,200.

Gain on Debt Restructure, $6000.

$6,000 Gain on Debt Restructure, $800; Gain on Disposal of Equipment, $2,200.

No gain or loss should be recognized.

Not sure which option. Thanks