An asset is purchased on January 1 for $45,700. It is expected to have a useful life of five years after which it will have an expected residual value of $6,200. The company uses the straight-line method. If it is sold for $32,400 exactly two years after it is purchased, the company will record a:
a. gain of $2,500.
b. loss of $10,800.
c. loss of $2,500.
d. gain of $10,800.
