On January 1, 2022, Skyline Limousine Co. purchased a limousine at an acquisition cost of \(\$ 28,000\). Skyline depreciated the vehicle by the straight-line method using a 4-year service life and a \(\$ 4,000\) salvage value. The company's fiscal year ends on December 31 .

Instructions

Prepare the journal entry or entries to record the disposal of the limousine, assuming that it was:

a. Retired and scrapped with no salvage value on January 1, 2026 .

b. Sold for \(\$ 5,000\) on July \(1,2025\).