SITUATION:

The CEO decided to trade in their current company vehicle for a new vehicle last week. Below are various details from the closing documents and the accounting system.

Transaction date $12/31/$XXX$1$

Old Vehicle historical cost $$50,000$

Old Vehicle book value $$10,000$

Old Vehicle accumulated depreciation $$40,000$

Remaining note payable on Old Vehicle $$7,500$

Total XXX$1$ Depreciation Expense $$300,000$

New Vehicle purchase price $$75,000$

New Vehicle taxes & fees $$5,000$

REQUIREMENTS:

$1)$ Given the information above, record the trade$-$in of the "Old Vehicle" on the purhcase of

the "New Vehicle." Assume that the new vehicle is $100\%$ financed.