Martinez, Incorporated acquired a patent on January 1, 2020 for $40,000 cash. The patent was estimated to have a useful life of 10 years with no residual value. On December 31, 2021, before any adjustments were recorded for the year, management determined that the remaining useful life was 6 years (with that new estimate being effective as of January 1, 2021). On June 30, 2022, the patent was sold for $25,000. Required:

1. Determine the gain (loss) on sale on June 30, 2022.
2. Prepare the journal entry to record the sale of the patent on June 30, 2022.