December 22

Traded the old company truck for a new truck. The old truck cost $3800 and on September 30, the end of the quarter, had depreciated $2200. Straight line depreciation on the old truck is $40 per month. The new truck listed for $19950 and a $3000 trade-in allowance on the purchase of the new truck was issued. This trade has no commercial and no gain or loss will be recognized on this transaction.

An additional check for $540 was issued to the DMV for the vehicle license fees. Three entries are required for this trade.

My answer:

Accumulated Depreciation	2320
Truck	14630
Cash		16950
License Expense	540
Cash		540

I do not know what the third entry is supposed to be.