Elec-Tric Inc. is experiencing financial difficulties and is seeking ways to settle a \(\$ 100,000\) debt with one of its creditors. The creditor is willing to accept \(\$ 70,000\) in cash or accept land that cost Elec-Tric Inc. \(\$ 20,000\) but was recently appraised at \(\$ 90,000\). The controller of the company wishes to settle the debt by transferring the land, while the president of the company feels the debt should be settled by transferring the \(\$ 70,000\) in cash.

\section*{Required}

Discuss the accounting procedures and financial statement disclosures to be used by Elec-Tric Inc. to account for and report the settlement of the debt with the

(a) transfer of the land and

(b) transfer of the \(\$ 70,000\) cash.