The WTF company has a truck that was totalled when a flock of herons ran across the road and the driver slammed on the breaks and skidded into a farmers field and hit two cows and a turkey. They need to buy a new truck. The dealer will give them a $1,000 trade in value on the totalled truck if they agree to clean the turkey feathers out of the grill. They choose to buy a new truck which has a sticker price of $52,000. They pay $20,000 in cash and take out a note for the remaining amount they owe. The totalled truck was originally purchased for $32,000 and has accumulated depreciation of $30,000. Answer the following questions about this situation. BTW: The turkey lived… for now! Turkey's useful life ends November 28, 2013
a) What is the gain or loss on the trade-in of the totalled truck?
b) What is the $ amount of the Note Payable?
c) What is the $ amount the new truck will be recorded at?
d) Produce the journal entry to record this transation?