Oriole Company owes $166,000 plus $14,600 of accrued interest to Waterway State Bank. The debt is a 10-year, 10% note. During 2017, Orioles business deteriorated due to a faltering regional economy. On December 31, 2017, Waterway State Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $321,000, accumulated depreciation of $176,550, and a fair value of $146,000.

See attached photo.

No. Date Account Titles nd Explanation Debit Credit 1. Deceiber 31, 2017 tate Bank (Creditor)i 2. Docember 31, 2017 How snould On01 r!!part the falloning in its 2a17 inoome statement? 1. Gain ar los an tha dispasitian af machine 2. Gain r lves on restructuring of ceb ste d af tra sremng the Tach ne, ale cecides tgrant 14 D 0 shares o its com on steck $1 par which nas fair valul! S 146, OD in full settlement cf t e carli atitr. 1 Waterway State B nk t eats rale's stock as a trading investment prepare or the account tit es d enter O for the amounts. Credit account tit es are automatica y ndented when amount is entered o not Indent man ally urre! that th ntr es to e ard t e transacti n r t parties (I no entry s ,equire se ect o Entr No. Date Account Titles nd Explanation Debit Credit 1. December 31, 2017 Waterway State B 2. Docember 31, 2017