A company had a tractor destroyed by fire. The tractor originally cost $131,000 with accumulated depreciation of $65,400. The proceeds from the insurance company were $26,000. The company should recognize:
A. A gain of $39,600.
B. A gain of $65,600.
C. A gain of $26,000.
D. A loss of $39,600.
E. A loss of $65,600.
Answer: D
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