Equipment was purchased for $60,000 with an expected useful life of four years. The company uses the sum-of-the-years’ digits method of depreciation and expects salvage value to equal the removal cost at the end of the fourth year. At the end of the third year, new equipment is purchased to replace the present equipment. The old equipment is sold for $15,000, and removal costs are $3,000.

Prepare the entries to record the retirement of the old equipment.