Bison Transport is a large trucking company that operates from (Ontario to British Columbia in Canada and in the United States. Bison uses the units-of-production (UOP) method to depreciate its trucks because its managers believe UOP depreciation best measures wear and tear Bison Transport trades in its trucks often to keep driver morale high and maximize fuel efficiency. Assume that in 2017, the company acquired a tractor-trailer rig costing \(\$ 280,000\) and expected it to remain in service for five years or \(1,000,000 \mathrm{~km}\). Estimated residual value would be \(\$ 40,000\). During 2017 , the truck was driven \(130,000 \mathrm{~km}\); during \(2018,180,000 \mathrm{~km}\);

and during \(2019,180,000 \mathrm{~km}\). After \(90,000 \mathrm{~km}\) in 2020 , the company wishes to trade in the tractor-trailer rig for a new rig. Assume the trade-in value of the old rig is \(\$ 0\).

{Requirements}

1. Prepare the journal entry to derecognize the rig, 2. What effect does this have on the financial statements?