Question 29 options: During the current year, a company exchanged an old truck c

Question

Question 29 options:

During the current year, a company exchanged an old truck costing $58,000 with accumulated depreciation of $52,000 for a new truck. The new truck had a cash price of $80,000 and the company received a trade-in allowance on the old truck with the balance of $64,000 paid in cash.

Assuming this transaction has commercial substance, in the journal entry to record the exchange, will a gain or a loss be recorded?

How much of a gain or loss will be recorded? (Be sure to only type the amount. Do not use $, commas, or decimal points).

Explanation / Answer

Gain on exchange =80000-64000-(58000-52000)= 10000

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