Blue Company owes $175,000 plus $15,200 of accrued interest to Kingbird State Bank. The debt is a 10-year, 10% note. During 2017, Blues business deteriorated due to a faltering regional economy. On December 31, 2017, Kingbird State Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $329,000, accumulated depreciation of $180,950, and a fair value of $152,000.

Assume that, instead of transferring the machine, Blue decides to grant 15,000 shares of its common stock ($10 par) which has a fair value of $152,000 in full settlement of the loan obligation. If Kingbird State Bank treats Blues stock as a trading investment, prepare the entries to record the transaction for both parties. (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 amount is entered. Do not indent manually.)