An asset's book value is $36,000 on January 1, Year 6. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $25,000, the company should record:
A. A gain on sale of $1,000.
B. A gain on sale of $2,000.
C. A loss on sale of $2,000.
D. A loss on sale of $1,000.
E. Neither a gain or loss is recognized on this type of transaction.
Answer: C
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