1. Funland Corp. sold a building for $600,000. Funland received a down payment of $120,000 as well as annual principal payments of $120,000 for each of the subsequent 4 years. Funland purchased the building for $500,000 and claimed depreciation of $80,000. What amount of gain should Funland report in the year of sale using the installment method?

1. $36,000
2. $54,000
3. $120,000
4. $180,000