On July 1, Jaguar Co., a water distiller, acquired new bottling equipment with a list price of $385,000. Jaguar received a trade-in allowance of $100,000 on the old equipment of a similar type, paid cash of $35,000, and gave a series of five notes payable for the remainder. The following information about the old equipment is obtained from the account in the equipment ledger: cost, $280,000; accumulated depreciation on December 31, the end of the preceding fiscal year, $144,000; annual depreciation, $16,000. Journalize the entries to record

(a) The current depreciation of the old equipment to the date of trade-in

(b) The exchange transaction on July 1 for financial reporting purposes.