A Ford F150 Truck was purchased on 4/1/16 for $10,000 with a note payable to Ford Motor Credit for $8,000. The MSRP on the Ford truck was $14,000 (FMV), but a $4,000 rebate was given at the time of purchase. Additionally, a $2,000 credit was given for a trade-in (a GMC truck). The trade-in truck (GMC truck) had a historical cost of $12,000. The GMC was purchased on 7/1/11 and the truck had a 5 year useful life. There are no loans on the GMC truck (it is wholly owned). Assume straight-line depreciation (no salvage value) and use US Generally Accepted Accounting Principles (GAAP).

a.Please provide the journal entry(s) to record this transaction (acquisition of the new truck and the disposal of the old truck).

b.Is there a gain or loss on the transaction?

c.What is the amount of gain or loss?