1. Turtle Company trades its used machine for a new model at Green Business Inc. The exchange has commercial substance. The used machine has a book value of $8,000 (original cost $12,000 less $4,000 accumulated depreciation) and a fair value of $7,000. The new model lists for $21,000. Green Business gives Turtle company a trade-in allowance of $9,000 for the used machine.

How much is the loss on the disposal of this machine?

Please prepare journal entries for this transaction.