Assume that Gonzalez Company purchased an equipment on January 1, 2014, for $60,000. The equipment had an estimated life of six years and an estimated residual value of $6,000. The company used the straight-line method to depreciate the equipment. Assume that Gonzalez Company sold the equipment on July 1, 2016, and received $15,000 cash and a note for an additional $15,000.

Required: 1. Make the journal entry to record depreciation on the equipment through July 1, 2016. Record the sale of the asset on July 1, 2016.

2. How should the gain or loss on the sale of the asset be presented on the income statement?