(Solution) - Crowe Company purchased a heavy duty truck on July 1 2007 -(2025 Original AI-Free Solution)

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Crowe Company purchased a heavy-duty truck on July 1, 2007, for $30,000. It was estimated that it would have a useful life of 10 years and then would have a trade-in value of $6,000. The company uses the straight-line method. It was traded on August 1, 2011, for a similar truck costing $42,000; $16,000 was allowed as trade-in value (also fair value) on the old truck and $26,000 was paid in cash. A comparison of expected cash flows for the trucks indicates the exchange lacks commercial substance. What is the entry to record the trade-in?