Jacksons Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years, or 10,000 hours of operation. The equipment was purchased on January 1, 2020 and was used 2,500 hours in 2020 and 2,100 hours in 2021. On January 1, 2022, the company decided to sell the equipment for $315,000. Jacksons Corporation uses the units-of- production method to account for the depreciation on the equipment.

1.) Will the entry to record the sale of the equipment show a gain or loss?

2.) How much will the gain or loss be?