MB replaced a major component of its plant (original cost of the component, $12,000 (60 percent depreciated), with a new component that cost $17,500 in cash. Therefore, MB should make the following entry: 1) Accumulated amortization7,200

Plant	17,500
Gain on disposal		7,200
Cash		17,500
2) Plant (or accumulated amortization)	17,500
Cash		17,500
3) Accumulated amortization	7,200
Plant		5,500
Loss on disposal		4,800
Cash		17,500
4) Plant	17,500
Loss on disposal	12,000
Plant		12,000
Cash