Mercury Inc. purchased equipment in 2019 at a cost of $315,000. The equipment was expected to produce 570,000 units over the next five years and have a residual value of $30,000. The equipment was sold for $160,500 part way through 2021. Actual production in each year was: 2019 = 81,000 units 2020 = 129,000 units 2021 = 65,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Required: 1. Calculate the gain or loss on the sale. 2. Prepare the journal entry to record the sale. 3. Assuming that the equipment was instead sold for $197,500, calculate the gain or loss on the sale. 4. Prepare the journal entry to record the sale in requirement 3.