A company purchased equipment valued at $66,000. It traded in old equipment for a $9,000 trade-in allowance and the company paid $57,000 cash with the trade-in. The old equipment cost $44,000 and had accumulated depreciation of $36,000. This transaction has commercial substance. What is the recorded value of the new equipment?
A) $8,000.
B) $9,000.
C) $57,000.
D) $65,000.
E) $66,000.
E) $66,000.
Since the transaction has commercial substance, the $1,000 gain is recognized and the new machine is recorded at its market value of $66,000.
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