An Asset's Book Value Is $36,000 on January 1, Year

Multiple Choice

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 loss on sale of $2,000.
B) A loss on sale of $1,000.
C) Neither a gain or loss is recognized on this type of transaction.
D) A gain on sale of $1,000.
E) A gain on sale of $2,000.