Carmichael Ltd acquired a truck with a cost of \($125\) 000, an estimated useful life of 6 years and a residual value of \($15\) 000. The truck is expected to travel 30 000km per year for each year for the first three years of its useful life and 25 000km per year for the next three years. The company uses units-of-production depreciation. Ignore GST.

Required

(a) Prepare the journal entries for each of the following events:

i. Sell the tractor for cash of \($60\) 000 after 2 years of use.

ii. Trade in the tractor for a \($20\) 000 allowance after 4 years on another tractor with a cash price of \($137\) 500.

iii. Scrap the tractor after 5 years of use. The tractor was given to a scrap dealer who pays \($1000\) to remove it.