Infill Land Development Company is in financial difficulty. The company has an 8-acre parcel of land approved for development with a current up to date independent appraised value of $2,100,000. The 8 acres of land originally cost Infill Development $1,400,000.

Infill has a loan outstanding with the Bank of Walnut Grove in the amount of $2,350,000.

On July 1, 2020, the board of directors of the bank agreed to accept the land currently valued at $2,100,000 in full settlement of the $2,350,000 loan.

Instruction

Prepare the journal entries required for both the Bank of Walnut Grove and the Infill Development to record the settlement of the outstanding loan.