A City Paid $40,000 for Police Cars with the Expectation

A city paid $40,000 for police cars with the expectation that they would have a useful life of 4 years. After 3 years, the city sold the cars for $3,000. How should the city account for the sale in the General Fund?
a.
$\begin{array}{lr}\text { Cash } & 3,000 \\\text { Accumulated depreciation } & 30,000 \\\text { Loss on sale of capital assets } & 7,000 \\\text { Capital Assets-equipment } &&40,000\end{array}$

b.
$\begin{array}{lll}\text { Cash } & 3,000 \\\text { Other financing source-sale of capital assets } && 3.000\end{array}$

c.
$\begin{array}{lr}\text { Cash } & 3,000 \\\text { Loss on sale of general fixed assets } & 37,000\\\text { Capital assets-equipment }&&40,000\end{array}$

d.
$\begin{array}{l}\text { Cash } & 3,000 \\\text { Accumulated depreciation } & 30,000 \\\text { Other financing use-sale of capital assets } & 7,000 \\\text { Capital Assets-equipment } &&40,000\end{array}$