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Flint Company owes $201,000 plus $17,900 of accrued interest to Buffalo State Bank. The debt is a 10-year, 10% note. During 2020, Flints business deteriorated due to a faltering regional economy. On December 31, 2020, Buffalo State Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $354,000, accumulated depreciation of $194,700, and a fair value of $179,000.

Prepare journal entries for Flint Company and Buffalo 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 amount is entered. Do not indent manually.)

No.	Date	Account Titles and Explanation	Debit	Credit
		Flint Company (Debtor):
1.	December 31, 2020	enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		Buffalo State Bank (Creditor):
2.	December 31, 2020	enter an account title to record the transaction for Buffalo State Bank (Creditor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Buffalo State Bank (Creditor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Buffalo State Bank (Creditor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Buffalo State Bank (Creditor) on December 31, 2020	enter a debit amount	enter a credit amount

		enter an account title to record the transaction for Buffalo State Bank (Creditor) on December 31, 2020	enter a debit amount	enter a credit amount

How should Flint report the following in its 2020 income statement?

1.		Gain or loss on the disposition of machine		select between gain and loss Ordinary GainOrdinary LossOrdinary ExpenseOrdinary Income
2.		Gain or loss on restructuring of debt		select between gain and loss Ordinary IncomeOrdinary LossOrdinary GainOrdinary Expense

Assume that, instead of transferring the machine, Flint decides to grant 16,000 shares of its common stock ($10 par) which has a fair value of $179,000 in full settlement of the loan obligation. If Buffalo State Bank treats Flints stock as a trading investment, prepare the entries to record the transaction for both parties. (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 amount is entered. Do not indent manually.)

No.	Date	Account Titles and Explanation	Debit	Credit
		Flint Company (Debtor):
1.	December 31, 2020	enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Flint Company (Debtor) on December 31, 2020	enter a debit amount	enter a credit amount
		Buffalo State Bank (Creditor):
2.	December 31, 2020	enter an account title to record the transaction for Buffalo State Bank (Creditor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Buffalo State Bank (Creditor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Buffalo State Bank (Creditor) on December 31, 2020	enter a debit amount	enter a credit amount
		enter an account title to record the transaction for Buffalo State Bank (Creditor) on December 31, 2020	enter a debit amount	enter a credit amount

		enter an account title to record the transaction for Buffalo State Bank (Creditor) on December 31, 2020	enter a debit amount	enter a credit amount

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