Use the Following Information for Questions 108 and 109

Use the following information for questions 108 and 109.
A machine cost $600,000, has annual depreciation of $100,000, and has accumulated depreciation of $450,000 on December 31, 2014. On April 1, 2015, when the machine has a fair value of $137,500, it is exchanged for a machine with a fair value of $675,000 and the proper amount of cash is paid. The exchange had commercial substance.
-The new machine should be recorded at

A) $537,500.
B) $612,500.
C) $662,500.
D) $675,000.