On December 31, 2021, Bates Company had on their books an assembly machine that was purchased for $392,000 and had accumulated $352,800 in depreciation. On April 1, 2022, Bates Company sold the machine for $40,000. On the date of the sale, they recorded the following journal entry:

Cash $40,000

Accumulated Depreciation- Equipment $352,800

Equipment $392,000

Gain on Disposal of Plant Assets $800

What error did Bates Company make in this journal entry?

-They credited a gain account rather than a revenue account.

-They recorded a gain on disposal rather than a loss on disposal.

-They did not account for a partial year of accumulated depreciation.

-They credited Gain on Disposal of Plant Assets rather than debiting it.