Prepare the journal entry to record the exchange

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Reference no: EM132836762

Question - On January 1, 2020, Gagne Co. exchanges an old delivery truck for a new truck. The old truck originally cost $40,000 in 2016 and has a current fair value of $4,750. The Accumulated Depreciation account related to the old delivery truck was $36,250 on the date of exchange. The new truck has a list price of $35,000. The dealer gave Gagne Co. a $5,000 trade-in allowance. Prepare the journal entry to record the exchange of the delivery truck on January 1, 2020.

Reference no: EM132836762

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