Martinez Owns an Asset That Cost $87,000 with Accumulated Depreciation

Multiple Choice

Martinez owns an asset that cost $87,000 with accumulated depreciation of $40,000. The company sells the equipment for cash of $42,000. At the time of sale, the company should record:

A) A gain on sale of $2,000.
B) A loss on sale of $45,000.
C) A loss on sale of $5,000.
D) A loss on sale of $2,000.
E) A gain on sale of $5,000.