The Harkness Company traded in a car for a newmodel. The old car cost $3,500 and was 90 percent depreciated. The list price of the new car was $4,500, but the Keen Car Agency offered to allow $1,200 on the old car. The Harkness Company had tried to sell the old car, and the best cash price they had been offered was $475. The Keen Car Agency offered to pay $475 cash for the old car if the Harkness Company did not want to trade it in.

a. Make the journal entries to record the trade-in from the point of view of the Harkness Company.

b. Make the journal entries to record the trade-in from the point of view of the Keen Car Agency.