Answer:
A.
Dr Depreciation Expense—Trucks $5,250
Cr Accumulated Depreciation—Trucks $5,250
B. Dr Accumulated Depreciation—Trucks $40,250
Dr Trucks $75,000
Cr Trucks $56,000
Cr Cash $51,000
Cr Gain on Exchange of Trucks $8,250
Explanation:
Preparation of the Journal entries
a. Preparation of the Journal entries to record the current depreciation of the old truck to the date of trade-in.
Dr Depreciation Expense—Trucks $5,250
Cr Accumulated Depreciation—Trucks $5,250
($7,000 × 9/12).
(Being to record the current depreciation of the old truck to the date of trade-in)
b.Preparation of the Journal entries to record transaction on October 1.
Dr Accumulated Depreciation—Trucks $40,250
($35,000+$5,250)
Dr Trucks $75,000
Cr Trucks $56,000
Cr Cash $51,000
Cr Gain on Exchange of Trucks $8,250
($40,250+$75,000-$56,000-$51,000)
(Being to record transaction on October 1)
