Cliff Company traded in an old truck for a new one. The old truck had a cost of $270,000 and accumulated depreciation of $162,000. The new truck had an invoice price of $277,000. Huffington was given a $107,000 trade-in allowance on the old truck, which meant they paid $170,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck?
A. $270,000
B. $108,000
C. $170,000
D. $277,000
E. $278,000
Answer: D
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