Headland Company owes $221,000 plus $20,100 of accrued interest to Sage State Bank. The debt is a 10-year, 10% note. During 2017, Headland's business deteriorated due to a faltering regional economy. On December 31, 2017, Sage State Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $402,000, accumulated depreciation of $221,100, and a fair value of $201,000. (a) Prepare journal entries for Headland Company and Sage 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 amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit Date Headland Company (Debtor): 1. December 31, 2017 Sage State Bank (Creditor): 2. December 31, 2017