Western Trucking Corporation uses the units-of-production depreciation method because units-of-production best measures wear and tear on the trucks. Consider these facts about one Mack truck in the company’s fleet. 

When acquired in 2022, the rig cost $450,000 and was expected to remain in service for 10 years or 1,000,000 miles. Estimated residual value was $150,000. The truck was driven 82,000 miles in 2022, 122,000 miles in 2023, and 162,000 miles in 2024. After 45,000 miles, on March 15, 2025, the company traded in the Mack truck for a less expensive Freightliner. Western Trucking Corporation also paid cash of $22,000. Fair value of the Mack truck was equal to its net book value on the date of the trade. 

Requirements 

1. Record the journal entry for depreciation expense in 2025. 

2. Determine Western Trucking Corporation’s cost of the new truck. 

3. Record the journal entry for the exchange of assets on March 15, 2025. Assume the exchange had commercial substance.