Journal entries: Recording the trade-in of an asset

In 2006, your firm purchased a copier for $20,000. To date, depreciation expense of $12,000 has been taken. In 2009, your firm trades in the copier for a new one costing $25,000. The trade-in allowance is $3,000. What is the journal entry to record the trade-in?

Copier (new)                                Debit 25,000
Accumulated Depreciation   Debit 12,000
Loss on Trade-In                       Debit   5,000

Copier (old)                                             Credit    20,000
Cash                                                            Credit    22,000*

* $25,000 for new copier – $3,000 trade-in allowance for old copier = $22,000 cash required

The new copier is recorded at list price. The cost of the old copier and its related, accumulated depreciation is removed from the books, and the loss is recorded.