At December 31, 2014 year-end, Arnold Corporation's investment in Oakes Inc. was $200,000 consisting of 80% of Oakes's $250,000 stockholders' equity on that date. On April 1, 2015, Arnold sold 20% interest (one-fourth of its holdings) in Oakes for $65,000. During 2015, Oakes had net income of $75,000 (earned uniformly) and on July 1, 2015, Oakes paid dividends of $40,000. Arnold uses the equity method to account for the investment. Required: 1. What is the gain or loss on sale of the 20% interest? 2. Record the journal entries for Arnold for the year ending December 31, 2015. Use the beginning-of-the-year-sale-date assumption.