1. ABC Moving and Storage acquired a new truck for $100,000, paying $20,000 cash and signing a promissory note for the balance. According to the bill of sale, ABC also paid cash for sales tax of 8%, plus registration, tags and delivery fees of $400. The new truck is estimated to have a 5-year economic life and a residual (salvage) value of $8,400. ABC uses sum-of-the-years-digits depreciation. Due to delays, the truck was not placed in service until April 1, 2019. ABC has a December 31 fiscal year.

a. Prepare journal entries to record the purchase of the truck and related depreciation for 2019.

b. The date is now March 31, 2025 and ABC sells the used truck for $10,000. Prepare the entry that is required to record the sale of the truck and any gain or loss resulting from the sale.