Gray Football Co

Multiple Choice

Gray Football Co.had a player contract with Vance that is recorded in its books at $3,600,000 on July 1, 2007.Day Football Co.had a player contract with Simms that is recorded in its books at $4,500,000 on July 1, 2007.On this date, Gray traded Vance to Day for Simms and paid a cash difference of $450,000.The fair value of the Simms contract was $5,400,000 on the exchange date.The exchange had no commercial substance.After the exchange, the Simms contract should be recorded in Gray's books at

A) $4,050,000.
B) $4,500,000.
C) $4,950,000.
D) $5,400,000.