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question malone exhanged an old sanding machine which cost 40 000 andwas 60 deprecia 4293769

Question

Malone exhanged an old sanding machine, which cost $40,000 andwas 60% depreciated, for a similar machine having a current fairmarket value of $21,000. Malone received a cash difference of$3,000. What is the historical cost of the new machine and gain orloss recorded on the transaction? This exchange lacks commercialsubstancece

Record new equipmentat                                                      Record a gain/(loss)of:

A)$21,000                                                                                 $5,000

B)$24,000                                                                                 $(16,000)

C)$24,000                                                                                  $8,000

D)$21,000                                                                                 $3,000

E)None of the above. The answeris____________________________

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