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Question(s) / Instruction(s):

An asset's book value is $36,000 on January 1, 2008. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, 2009 for $25,000, the company should record:

a)            Neither a gain nor loss is recognized on this type of transaction.

b)            A gain on sale of $2,000.

c)            A loss on sale of $1,000.

d)            A gain on sale of $1,000.

e)            A loss on sale of $2,000.

 

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