Willis Bus Service traded in a used bus for a new one. The original cost of the old bus was $53,200. Accumulated depreciation at the time of the trade-in amounted to $35,800. The new bus cost $76,000 but Willis was given a trade-in allowance of $10,100.

a. What amount of cash did Willis have to pay to acquire the new bus?

b. Compute the gain or loss on the disposal for financial reporting purposes.