the book value of 2 trucks is 15,679 with loan balances of 43,669. Dealership's gross allowance is 39,000 and the cost of the new vehicle is 29,700. Amount financed for new vehicle is 26,186. Dealership pays of outstanding debt on old vehicles. Would you realize a gain on this trade? What would you record as the cost of the new vehicle? I figured a gain of 19,450 but I am not sure this is the correct way to handle this.
Thank you