On Jan 1, 2020, Elway Inc purchases a piece of equipment for $55,000. The equipment has a $3,000 salvage value and a useful life of 4 years or 130,000 units of production.

Elway uses the straight line method of depreciation.

On Jan 1, 2022, Elway sells the equipment for $30,000 cash. What is Elway's gain or loss on the disposal of the equipment?

Group of answer choices

$1,000 gain

$1,000 loss

$2,500 gain

$2,500 loss