On 30 June 2020 Mary Ltd had the following balances for plant: plant (cost) $20,000, accumulated depreciation $4,000.

On 1 July 2020 the plant was traded in for newer plant. A trade-in allowance of $18,000 was received.

On 1 July 2020, one entry that Mary Ltd should recognise is:

Select one:

a.

a debit to cash $18,000.

b.

a debit to carrying amount of asset sold $16,000.

c.

a debit to loss on asset sold of $2,000.

d.

a debit to plant $20,000.