Shamrock Company owes $190,000 plus $16,600 of accrued interest to Bridgeport State Bank. The debt is a 10-year, 10% note. During 2017, Shamrocks business deteriorated due to a faltering regional economy. On December 31, 2017, Bridgeport State Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $344,000, accumulated depreciation of $189,200, and a fair value of $166,000.

Prepare journal entries for Shamrock Company and Bridgeport State Bank to record this debt settlement

No. Account Titles and Explanation Debit Credit Shamrock Com pany (Debtor): 1. December 31, 2017 ridgeport State Bank (Creditor): 2. December 31, 2017