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When a plant asset is sold, the Cash and Accumulated Depreciation accounts are always debited, and the Equipment account is credited. In the event there is a loss or gain from the sale, either the Loss on Disposal of Plant Assets or the Gain on Disposal of Plant Assets accounts will have an entry. When old plant assets are exchanged for new plant assets, it is generally accepted that any gains from a trade need not be recognized. The amount that is owed after credit for the trade-in is known as the boot, which is also the required cash payment. The entry is this situation is Debit Accumulated Depreciation (old equipment) Debit Plant Assets (new equipment) Credit Plant Assets (old equipment) Credit Cash.
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