A company bought new heating system for $42,000 and was given a trade-in of $2,000 on an old heating system, so the company paid $40,000 cash with the trade-in. The old system had an original cost of $37,000 and accumulated depreciation of $34,000. If the transaction has commercial substance, the company should record the new heating system at:
A. $43,000.
B. $40,000.
C. $2,000.
D. $3,000.
E. $42,000.
Answer: E
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