On January 1,2013,Canal Locks Corporation Purchased Drilling Equipment for $11,500

On January 1,2013,Canal Locks Corporation purchased drilling equipment for $11,500.The equipment has an estimated useful life of four years and a salvage value of $200.Given this information,if Canal uses the sum-of-the-years'-digits method of depreciation and then trades the equipment for new equipment with a fair market value of $16,000 on December 31,2014,and pays $8,000 cash in the exchange,assuming the exchange has commercial substance,the new equipment should be recorded at

A) $16,000.
B) $12,475.
C) $11,590.
D) $8,110.