Exercise 14-26 Blossom Co. owes $193,900 to Blue Inc. The debt is a 10-year, 11% note. Because Blossom Co. is in financial trouble, Blue Inc. agrees to accept some land and cancel the entire debt. The...

Blossom Co. owes $193,900 to Blue Inc. The debt is a 10-year, 11% note. Because Blossom Co. is in financial trouble, Blue Inc. agrees to accept some land and cancel the entire debt. The property has a book value of $92,500 and a fair value of $127,300.

(a)		Prepare the journal entry on Blossom’s books for debt restructure.
(b)		Prepare the journal entry on Blue’s books for debt restructure.

(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.	Account Titles and Explanation	Debit	Credit
(a)	Blossom Co.'s entry:
(b)	Blue Inc. entry: