Malone Company traded in an old machine with a book value of $15,000 on a new machine. The exchange did not have commercial substance. The new machine, which had a cash price of $75,000, was purchased for $64,000 cash plus the old machine. Malone should record the cost of the new machine as
A) $64,000.
B) $71,000.
C) $75,000.
D) $79,000.

Question

Quizplus · Accepted Answer

The Answer of Malone Company traded in an old machine with a book value of $15,000 on a new machine. The exchange did not have commercial substance. The new machine, which had a cash price of $75,000, was purchased for $64,000 cash plus the old machine. Malone should record the cost of the new machine as
A) $64,000.
B) $71,000.
C) $75,000.
D) $79,000.

Malone Company Traded in an Old Machine with a Book