Mercury Incorporated purchased equipment in 2022 at a cost of $207,000. The equipment was expected to produce 570,000 units over the next five years and have a residual value of $36,000. The equipment was sold for $106,600 part way through 2024. Actual production in each year was: 2022 = 82,000 units; 2023 = 130,000 units; 2024 = 66,000 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 $138,600, calculate the gain or loss on the sale.
4. Prepare the journal entry to record the sale in requirement 3.