Larkspur Inc. owes Pearl Bank $205,000 plus $19,100 of accrued interest. The debt is a 10-year, 10% note. During 2020, Larkspur's 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 $400.000. accumulated depreciation of $229,000, and a fair value of $185,000. The bank plans to dispose of the machine at a cost of $6,200. Both Larkspur and Pearl Bank prepare financial statements in accordance with IFRS 9. Prepare the journal entries for Larkspur 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. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry"for the account titles and enter for the amounts.) Debit Credit Date Account Titles and Explanation Larkspur Inc. Dec. 31, 2020 Pearl Bank Dec. 31, 2020