Question: Pete Co. traded in an old machine costing $10,000 for a new machine for a cash price of $13,000 with a trade-in allowance of $3,000.

Pete Co. traded in an old machine costing $10,000 for a new machine for a cash price of $13,000 with a trade-in allowance of $3,000. Accumulated Amortization on the old machine was $6,000.
a. What is the book value of the old machine? What is the loss?
b. Provide a journal entry to record the exchange.

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