Current Attempt in Progress Monty Company owes $221,000 plus $19,700 of accrued interest to Flounder State Bank. The debt is a 10-year, 10\% note. During 2025, Monty's business deteriorated due to a faltering regional economy. On December 31, 2025, Flounder State Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $406,000, accumulated depreciation of $223,300, and a fair value of $197,000. (a) Prepare journal entries for Monty Company and Flounder 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.)