asset retirement accounting entries

Hi,

We have an asset worth with cost of 13964.29 that is retired, with proceed of 1000. The proceed is VAT applicable at 12%.

We expect that following entries would be created:

DR Accumulated Depr 13964.29  

CR Fixed Asset                               13964.29

DR Proceeds               1000

CR Gains                                            892.86

CR VAT                                              107.14

After running the Create Accounting Entries process, the above entries were created, with additional accounting line of

CR Loss                                            892.86

Can someone explain this? Is my setup incorrect?

Thank you.