In January 2011, Bevis Company Exchanged an Old Machine, with a Book

Multiple Choice

In January 2011, Bevis Company exchanged an old machine, with a book value of $156,000 and a fair value of $160,000, and paid $40,000 cash for a similar used machine having a fair value of $200,000. The exchange lacked commercial substance. At what amount should the machine acquired in the exchange be recorded on Bevis's books?

A) $156,000
B) $196,000
C) $200,000
D) $204,000