An asset is purchased on January 1 for $42,700. It is expected to have a useful life of five years after which it will have an expected residual value of $5,600. The company uses the straight-line method. If it is sold for $31,200 exactly two years after it is purchased, the company will record a:

Multiple Choice

loss of $8,160.

gain of $8,160.

loss of $3,340.

gain of $3,340.