A company purchases new office equipment for $81,000 cash plus a trade-in on its old office equipment. Carrying amount of the old office equipment is $34,000 (= $75,000 cost less $41,000 accumulated depreciation). Fair value of old office equipment is $20,000.

What is the journal entry to record the purchase of the new office equipment?

a.

DR Office equipment (new) $81,000, and CR Bank $81,000

b.

DR Office equipment (new) $101,000, DR Accumulated depreciation office equipment (old) $41,000, DR Loss on disposal of office equipment (old) $14,000, CR Office equipment (old) $75,000, and CR Bank $81,000

c.

DR Office equipment (new) $101,000, DR Loss on disposal of office equipment (old) $14,000, CR Office equipment (old) $34,000, and CR Bank $81,000

d.

DR Office equipment (new) $101,000, CR Office equipment (old) $20,000, and CR Bank $81,000