On January 4, 2010, Rack Company Traded in a Used

On January 4, 2010, Rack Company traded in a used bulldozer with a carrying amount of $65, 000 for a new bulldozer having a list price of $120, 000 and paid cash difference of $40, 000 to the dealer.The used bulldozer had a fair value of $75, 000 on the date of exchange.At what amount should the new bulldozer be recorded on Rack's books?

A) $ 40, 000
B) $105, 000
C) $115, 000
D) $120, 000