Troubled-Debt Restructurings Settlement of Debt Issuance of Equity. E13.21 (c) Strickland Company owes $200,000 plus $18,000 of accrued interest to Moran State Bank. The debt is a 10-year, 10% note. During 2025, Strickland's business deteriorated due to a faltering regional economy. On December 31, 2025, Strickland decides to grant 15,000 shares of its common stock ($10 par) which has a fair value of $180,000 in full settlement of the loan obligation. If Moran State Bank treats Strickland's stock as a trading investment, prepare the entries to record the transaction for both parties. Solution: In Morgan Bank (Lender) Books Debit Credit