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Please solve the problem correctly and show work. Thank you Subject: ACC 203...

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Accounting

Please solve the problem correctly and show work. Thank you Subject: ACC 203 Ch 13: Homework
Question 9 of 9
-12
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Waterway Company owes $208,000 plus $18,700 of accrued interest to Wildhorse State Bank. The debt is a 10-year, 10% note. During 2025, Waterway's business deteriorated due to a faltering regional economy. On December 31,2025, Wildhorse State Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $405,000, accumulated depreciation of $222,750, and a fair value of $187,000.
(a)
Prepare journal entries for Waterway Company and Wildhorse State Bank to record this debt settlement. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)
No. Date Account Titles and Explanation
Debit
Credit
Waterway_Company(Debtor):
December
Wildhorse State Bank (Creditor):
December
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