Tamarisk Inc. owes Pearl Bank $182,000 plus $15,600 of accrued interest. The debt is a 10-year, 10% note. During 2020, Tamarisks business declined due to a slowing regional economy. On December 31, 2020, the bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $344,000, accumulated depreciation of $209,000, and a fair value of $162,000. The bank plans to dispose of the machine at a cost of $6,100. Both Tamarisk and Pearl Bank prepare financial statements in accordance with IFRS 9.

prepare the journal entries for Tamarisk Inc. and Pearl Bank to record this debt settlement. Assume Pearl had previously recognized an allowance for doubtful accounts for the impairment prior to the settlement.

Date	Account Titles and Explanation	Debit	Credit
	Tamarisk Inc.
Dec. 31, 2020
	Pearl Bank
Dec. 31, 2020

Assume that, instead of transferring the machine, Tamarisk decides to grant the bank 15,000 of its common shares, which have a fair value of $173,000. This is in full settlement of the loan obligation. Assuming that Pearl Bank treats Tamarisks shares as FV-NI investments, prepare the entries to record the transaction for both parties. Assume Pearl had previously recognized an allowance for doubtful accounts for the impairment prior to the settlement.

Date	Account Titles and Explanation	Debit	Credit
	Tamarisk Inc.
Dec. 31, 2020
	Pearl Bank
Dec. 31, 2020