I am having a bit of trouble with trade-in allowances....

old car is was bought for $22000 and had upgrades made to the tune of $8000
so car cost is $30000?

with amortization at $24000, the book value of car is now $6000.

Trade-in car and paid $20000 cash for new car worth $30000

is it a gain of $2000 or a loss of $4000

On debit side
new car - 30000
amort - 24000
Total is $54000
on credit side

old car - 30000
cash - 20000
=50000

now do I add the
book value of car - 6000
-2000 (gain)
to get to 54000

or do I pay 4000 (loss)?



thanks