Q. On June 30, 2010 the industry sold $600,000 of its equipment appearing on the December 31, 2009 balance sheet for a price of $500,000. The accumulated depreciation related to this equipment through December 2009 is $100,000. The buyer paid $100,000 down and signed a two-year, 6% note with Grass Roots for the remainder. To satisfy the note the buyer will make four equal semi-annual loan payments each December 31st and June 30th of $107,614.

1. Determine the gain or loss (if any) on the sale. Be sure to bring depreciation up to date to the sale date prior to this calculation.

2. Prepare entries required for Grass Roots on June 30 for depreciation and the sale as well as the first payment received on December 31, 2010.