A publicly traded enterprise purchases a truck for $150,000. The major components of the truck and their respective values and useful lives have been identified as follows:
Body $100,000. 25 Years (No scrap value)
Tires $20,000 5 Years (No scrap value)
Engine $30,000 20 Years (Scrap value $5,000)
Straight-line amortization applies to all components.
At the end of Year 15, the company replace the truck's engine with a new engine costing $20,000. The old engine was sold for $2,000.
Prepare the journal entries to record the disposal of the old engine and the acquisition of the new one.

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The Answer of A publicly traded enterprise purchases a truck for $150,000. The major components of the truck and their respective values and useful lives have been identified as follows:
Body $100,000. 25 Years (No scrap value)
Tires $20,000 5 Years (No scrap value)
Engine $30,000 20 Years (Scrap value $5,000)
Straight-line amortization applies to all components.
At the end of Year 15, the company replace the truck's engine with a new engine costing $20,000. The old engine was sold for $2,000.
Prepare the journal entries to record the disposal of the old engine and the acquisition of the new one.

A Publicly Traded Enterprise Purchases a Truck for $150,000