Atco Industries had a piece of equipment that cost $25,000 and had accumulated depreciation of $23,000.

Requirement

Record the disposition of the equipment assuming the following independent situations:

a. Atco discarded the equipment, receiving $0.

b. Atco sold the equipment for $3,000 cash.

c. Atco traded the equipment in on a new piece of equipment costing $30,000. Atco was granted a $5,000 trade-in allowance for the old equipment and paid the difference in cash.

d. Atco traded the equipment in on a new piece of equipment costing $20,000. Atco was granted a $1,000 trade-in allowance for the old equipment and signed a note payable for the difference.