Swann Company sold a delivery truck on April $1,$ Year $5.$ Swann had acquired the truck on January $1,$ Year $1,$ for $$40,500.$ At acquisition, Swann had estimated that the truck would have an estimated life of $5$ years and a residual value of $$3,000.$ Swann uses the straight$-$line method of depreciation. At December $31,$ Year $4,$ the truck had a book value of $$10,500.$

Required:

Prepare any necessary journal entries to record the sale of the truck, assuming it sold for:

a$.$ $$9,875$

b$.$ $$7,275$

How should the gain or loss on disposal be reported on the income statement?