On January 2,2020,Mullins Company purchased a delivery truck for $45,000 cash.The truck had an estimated useful life of seven years and an estimated residual value of $3,000.Straight-line depreciation was used.Assuming the transactions have commercial substance,prepare the journal entries to record the disposition of the truck on September 1,2019,under each of the following assumptions:
(a)The truck and $55,000 cash were exchanged for equipment that had a fair value of $70,000.
(b)The truck and $40,000 cash were exchanged for a new delivery truck that had a fair value of $70,000.

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The Answer of On January 2,2020,Mullins Company purchased a delivery truck for $45,000 cash.The truck had an estimated useful life of seven years and an estimated residual value of $3,000.Straight-line depreciation was used.Assuming the transactions have commercial substance,prepare the journal entries to record the disposition of the truck on September 1,2019,under each of the following assumptions:
(a)The truck and $55,000 cash were exchanged for equipment that had a fair value of $70,000.
(b)The truck and $40,000 cash were exchanged for a new delivery truck that had a fair value of $70,000.

On January 2,2020,Mullins Company Purchased a Delivery Truck for $45,000