Pine Company has a loan with a principal balance of $800,000, which is currently due. Pine Co. is experiencing financial difficulties and cant make the payment. The bank agrees to accept the following in full payment of the loan:

Cash of $100,000

Merchandise inventory (book value $400,000, fair value $340,000)

Equipment (book value $250,000, fair value $270,000)

prepare the entries:

1- To revalue equipment and merchandise inventory to fair value

2- To recognize the restructuring