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Unipal Company exchanged an old forklift with an original cost of $20,000, accumulated depreciation to date...

Unipal Company exchanged an old forklift with an original cost of $20,000, accumulated depreciation to date of $15,000, and a fair value of $6,000. The new forklift list price is $25,000. A trade-in allowance of $7,000 was given for the old forklift.
Which of the following is the correct journal entry to record the exchange?

Select one:
a. New Equipment 38,000
Old Equipment 20,000
Cash 18,000
b. New Equipment 23,000
Accumulated Depreciation 15,000
Equipment 20,000
Cash 18,000
c. New Equipment 23,000
Accumulated Depreciation 15,000
Old Equipment 20,000
Cash 17,000
Gain on Disposal 1,000
d. New Equipment 24,000
Accumulated Depreciation 15,000
Old Equipment 20,000
Gain on Disposal 1,000
Cash 18,000
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