41. On December 31, Reach It Batting Cages Company has decided to trade-in one of its batting cages for another one that has a cost of $500,000. The seller of the batting cage is willing to allow a trade-in amount of $40,000. The initial cost of the old equipment was $225,000 with an accumulated depreciation of $195,000. Depreciation has been taken up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction? a. The gain will not be recognized and will be added to the price of the old equipment. b. The gain will not be recognized and will be added to the price of the new equipment c. The gain will not be recognized and will be subtracted from the price of the old equipment d. The gain will not be recognized and will be subtracted from the price of the new equipment. 42. On December 31, Reach It Batting Cages Company has decided to trade-in one of its batting cages for another one that has a cost of $500,000. The seller of the batting cage is willing to allow a trade-in amount of $12,000. The initial cost of the old equipment was $225,000 with an accumulated depreciation of $195,000. Depreciation has been taken up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction? a. Loss of $12,000 b. Gain of $12,000 c. Loss of $18,000 d. No loss or gain will be recorded. 43. When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with the following entry: a. debit Machinery and Accumulated Depreciation; credit Machinery, Cash, and Gain on Disposal b. debit Machinery and Accumulated Depreciation; credit Machinery and Cash c. debit Cash and Machinery; credit Accumulated Depreciation d. debit Cash and Machinery; credit Accumulated Depreciation and Machinery 44 Miller Co. issued a $35,000, 60-day, discounted note to River City Bank. The discount rate is 6%. What is the maturity value of the note? a. $35,350 b. $37,100 c. $35,000 d. $34,650