Equipment was acquired at the beginning of the year at a cost of $78,660. The equipment was depreciated using the straight-line method based on an estimated useful life of six years and an estimated residual value of $7,920. Required:

(a) What was the depreciation expense for the first year?

(b) Assuming the equipment was sold at the end of the second year for $59,486, determine the gain or loss on sale of the equipment.

(c) Journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles.