Equipment was acquired at the beginning of the year at a cost of $78,720. The equipment was depriciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,920.

A. What was the depreciation expense for the first year?

B. Assuming the equipment was sold at the end of the second year for $59,500, determine the gain or loss on sale of the equipment.

C. Journalist the entry to record the sale. If an amount box does not require an entry, leave it blank.