Vexa Corporation incurred the following expenditures for the purchase and use of equipment which was placed into service on March 31, 2016.

Expenditure

Amount

List price of the equipment

$38,200

Sales taxes

$2,700

Advertising costs

$380

Insurance on the equipment after installation

$1,200

Delivery charges

$550

Set up costs

$450

Repairs due to accidental damages during installation

$330

Custom duties

$600

Power and other operating costs for using the machine during the year

$3,600

The company estimated the useful life of the equipment to be 6 years with an expected salvage value of $2,180. The straight-line method for depreciation was selected. On June 30, 2018, the company observed that if it exchanges the equipment for a new similar one, the result will be more productivity and an increase in total revenues. Accordingly, a decision was taken on that date to exchange it for a new similar one. On June 30, 2018, the old equipments fair value was $25,500, and the value of the new equipment was $35,000.

Required:

Prepare the journal entry to record the disposal of the equipment on June 30, 2018. (Show all your necessary calculations)