An asset's book value is $54,000 on January 1, Year 6. The asset is being depreciated $750 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $38,500, the company should record:

Multiple Choice

• A loss on sale of $1,000.

• A gain on sale of $2,000.

• A loss on sale of $2,000.

• Neither a gain or loss is recognized on this type of transaction.

• A gain on sale of $1,000.