Bill exchanged an old machine for a new one. The old machine cost $1,200 and had accumulated depreciation of $900 at the time of the exchange. The fair value of the machine was $250 at the time of the exchange. Bill also paid $1,075 at the time of the exchange. The new machine bill acquired has a fair value of $1,325. The exchange does not have commercial substance. What is the amount of Bill's gain or loss on this exchange? Be sure to indicate whether the amount is a gain or a loss. All necessary calculations must be shown to receive credit.

Prepare the journal entry that Bill should record for this exchange.