Larkspur Co. owes $197,000to Cullumber Inc. The debt is a 10-year, 11% note. Because Larkspur Co. is in financial trouble, Cullumber Inc. agrees to accept some land and cancel the entire debt. The land has a book value of $88,600and a fair value of $130,900.

(a)Prepare the journal entry on Larkspur's books for debt restructure.(b)Prepare the journal entry on Cullumber's books for debt restructure.

(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

(a)LarkspurCo.'s entry:

(b)Cullumber Inc. entry: