Cheney Company purchased a piece of equipment for $14,000 and depreciated it for three years over a 5-year estimated life with an expected residual value at the end of 5 years of $2,000. At the end of the third year, Cheney’s management decided to upgrade to equipment with increased capacity and sold the original piece of equipment for $7,500. Calculate the gain or loss on the sale at the end of the third year.