Lowery Food Market Owns Refrigeration Equipment That Cost $10,000 and Has

Lowery Food Market owns refrigeration equipment that cost $10,000 and has accumulated depreciation of $7,400. The company exchanges the equipment for new equipment worth $12,000. In addition to the old equipment, the company pays $10,000 for the new equipment. Which of the following is the correct entry to record the transaction?

A)
$$\begin{array} { | l | l | l | l | } \hline \text { Refrigeration equipment } & & 10,000 & \\\hline \text { Accumulated depreciation } & & 10,000 & \\\hline \begin{array} { l } \text { Gain on exchange of } \\\text { equipment }\end{array} & & 600 & \\\hline & \text { Cash } & & 12,000 \\\hline & \text { Refrigeration equipment } & & 7,400 \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | l | } \hline \text { Refrigeration equipment } & & 12,000 & \\\hline \text { Accumulated depreciation } & & 7,400 & \\\hline & \text { Cash } & & 10,000 \\\hline & \text { Refrigeration equipment } & & 9,400 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l | l | } \hline \text { Refrigeration equipment } & & 12,000 & \\\hline \text { Accumulated depreciation } & & 7,400 & \\\hline \begin{array} { l } \text { Loss on exchange of } \\\text { equipment }\end{array} & & 600 & \\\hline & \text { Cash } & & 10,000 \\\hline & \text { Refrigeration equipment } & & 10,000 \\\hline\end{array}$$
D) None of the above