Stone Company purchased a tractor at a cost of $180,000. The tractor has an estimated salvage value of $20,000 and an estimated life of 8 years, or 10,000 hours of operation. The tractor was purchased on January 1, Year 1 and was used 2,400 hours in Year 1 and 2,100 hours in Year 2. On January 1, Year 3, the company decided to sell the tractor for $70,000. Stone uses the units-of-production method to account for the depreciation on the tractor.

Based on this information, the entry to record the sale of the tractor will show:

A loss of $38,000

No gain or loss on the sale

A loss of $70,000

A gain of $70,000