Lufthansa's policy of rolling over entire fleets of aircraft in roughly 10 years-- before the aircrafts have outlived their usefulness--began when seven first-generation 747s were sold. The 747s were bought 6 to 9 years earlier for $22 million-$28 million each and sold for about the same price.

1. Assume an average original cost of $25 million per aircraft, an average original expected useful life of 10 years, and $3.5 million expected residual value for each aircraft. Also assume the planes were on average 8 years old at the time of disposal. Use straight-line depreciation. Compute the total gain or loss on the sale of the seven planes. Assume each plane sold for $25 million.

2. Prepare a summary journal entry for the sale.