An asset is purchased on January 1 for $41,700. It is expected to have a useful life of five years after which it will have an expected residual value of $5,400. The company uses the straight-line method. If it is sold for $30,800 exactly two years after it is purchased, the company will record a:

gain of $3,620.

loss of $7,280.

gain of $7,280.

loss of $3,620.