Sandox Corp. owns equipment that was purchased on January 1, 2014, for $90,000. The equipment has been depreciated using the straight-line method over five years and has a residual value of $10,000. On July 1, 2018, the company sold it for $14,000 cash and purchased new equipment for $100,000. Sandox paid $20,000 in cash and signed a 5 percent note, payable in five equal annual installments on June 30 of each year, starting on June 30, 2019. The company made the following additional payments in cash: $1,500 for a one-year insurance policy and $3,000 for installation of the equipment. Sandox decided to depreciate the new equipment using the double-declining-balance method over five years. The equipment has an estimated residual value of $12,000.

Required:
1. Compute the gain or loss on the sale of the old equipment and prepare the journal entry to record this transaction.
2. Prepare the journal entries to record all the transactions that occurred on July 1, 2018.
3. Compute the amount of the annual installment on the note payable and prepare the journal entry to record the payment of the first installment.
4. Prepare the necessary adjusting entries at December 31, 2018, the end of the company's fiscal year.