On October 1, Clear Spring Co., a water distiller, acquired new bottling equipment with a list price of $288,750. Clear Springs received a trade-in allowance of $60,000 on the old equipment of a similar type, paid cash of $28,750, 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, $210,000; accumulated depreciation on December 31, the end of the preceding fiscal year, $137,500; annual depreciation, $12,500. Journalize the entries to record
(a) The current depreciation of the old equipment to the date of trade-in and
(b) The exchange transaction on October 1 for financial reporting purposes.