An asset is purchased on January 1 for $43,200. It is expected to have a useful life of four years after which it will have an expected residual value of $5,700. The company uses the straight-line method. If it is sold for $31,400 exactly two years after it is purchased, the company will record a:

gain of $4,850.

gain of $6,950.

loss of $6,950.

loss of $4,850.