Swann Company sold a delivery truck on April $1,$ Year $5.$ Swann had acquired the truck on January $1,$ Year $1,$ for $$45,500.$ At acquisition, Swann had estimated that the truck would have an estimated life of $5$ years and a residual value of $$3,000.$ Swann uses the straight$-$line method of depreciation. At December $31,$ Year $4,$ the truck had a book value of $$11,500.$

Required:

$1.$ Prepare any necessary journal entries to record the sale of the truck, assuming it sold for:

a$.$ $$11,125$

b$.$ $$7,525$

$2.$ How should the gain or loss on disposal be reported on the income statement?