On January 1, 2008, Skyline Hotel Co. purchased a passenger van for transporting guests to and from airports and nearby shopping areas at an acquisition cost of $28,000. The vehicle has been depreciated by the straight line method using a four year service life and a $4,000 salvage value. The company’s fiscal year ends on December 31.
Instructions
Prepare the journal entry or entries to record the disposal of the van assuming that it was
(a) Retired and scrapped with no salvage value on January 1, 2012.
(b) Sold for $5,000 on July 1, 2011.
(c) Traded in on a new van on January 1, 2011. The fair market value of the old vehicle was $9,000, and $22,000 was paid in cash.
(d) Traded in on a new van on January 1, 2011. The fair market value of the old vehicle was $11,000, and $22,000 was paid in cash.