a) A company has decided to exchange some computers for a used truck. The company had listed the computers on its balance sheet at a cost of $20,000 with accumulated depreciation of $7,000. The fair value of these computers is $15,000. The company gave up the computers along with $500 cash for the used truck. The fair value of the used truck is $16,000. Prepare the journal entry for the transaction.

b) Using the same facts as above, assume that this time, the company exchanges the old computers along with $40,000 to buy new computers. The company received an $18,000 trade-in allowance for the old computers even though their fair value is only $15,000. The new computers have a list price of $57,000. As a result of the above, what journal entry will the company record: