A company had a tractor destroyed by fire. The tractor originally cost $130,000 with accumulated depreciation of $64,500. The proceeds from the insurance company were $92,500. The company should recognize

A company had a tractor destroyed by fire. The tractor originally cost $130,000 with accumulated depreciation of $64,500. The proceeds from the insurance company were $92,500. The company should recognize:

A gain of $27,000.

A loss of $27,000.

A gain of $92,500.

A loss of $65,500.

A gain of $65,500.

Cost of tractor	$ 130,000
Accumulated depreciation	(64,500)
Book value	$    65,500
Cash received	92,500
Gain	$    27,000