Mann, Inc., which owes Doran Co. $(See Below) in notes payable with accrued interest of $66,000, is in financial difficulty. To settle the debt, Doran agrees to accept from Mann equipment with a fair value of $(see below), an original cost of $(see below), and accumulated depreciation of $(see below).

Instructions

(a) Compute the gain or loss to Mann on the settlement of the debt.

(b) Compute the gain or loss to Mann on the transfer of the equipment.

(c) Prepare the journal entry on Mann 's books to record the settlement of this debt.

(d) Prepare the journal entry on Doran's books to record the settlement of the receivable.

Last Name / NP Amount Owed/ Accrued Int. /Fair Value Equip. /Original Cost / Acc. Deprec.

A D $2,000,000 $80,000 $1,850,000 $2,400,000 $800,000

E H $1,100,000 $55,000 $ 975,000 $1,200,000 $350,000

I P $3,000,000 $75,000 $2,250,000 $3,000,000 $900,000

Q S $2,200,000 $36,000 $1,800,000 $2,000,000 $400,000

T Z $3,000,000 $100,000 $2,950,000 $3,500,000 $500,000