Honest Truck Company is a large trucking company that operates throughout the United States. Honest Truck Company uses the units-of-production (UOP) method to depreciate its trucks. Honest Truck Company trades in trucks often to keep driver morale high and to maximize fuel economy. Consider these facts about one Mack truck in the company’s fleet: When acquired in 2010, the tractor-trailer rig cost $380,000 and was expected to remain in service for 10 years or 1,000,000 miles. Estimated residual value was $100,000. During 2010, the truck was driven 76,000 miles; during 2011, 116,000 miles; and during 2012, 156,000 miles.

After 37,000 miles in 2013, the company traded in the Mack truck for a less-expensive Freightliner with a sticker price of $300,000. Honest Truck Company paid cash of $28,000.

Determine Honest’s gain or loss on the transaction. Prepare the journal entry to record the trade-in of the old truck on the new one.