Journal entries to correct accounting errors. Give correcting entries for the following situations. In each case, the firm uses the straight-line method of depreciation and closes its books annually on December 31. Recognize all gains and losses currently.

a. A firm purchased a computer for $\$ 3,000$ on January 1, Year 3. It depreciated the computer at a rate of 25 percent of acquisition cost per year. On June 30, Year 5, it sold the computer for $\$ 800$ and acquired a new computer for $\$ 4,000$. The bookkeeper made the following entry to record the transaction:

b. A firm purchased a used truck for $\$ 7,000$. Its cost, when new, was $\$ 12,000$. The bookkeeper made the following entry to record the purchase:

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Equipment... 3,200 Cash 3,200