Michelle, a sole proprietor, sold two assets used in her trade or business. The sale of land generated a gain of $38,700, and the sale of a machine generated a $59,400 loss. As a result of these sales, Michelle should recognize:

Group of answer choices

$38,700 gain treated as long-term capital gain and $59,400 ordinary loss

$20,700 ordinary loss

None of the other answers is correct.

$20,700 capital loss