Use the Following Information for Questions 110 and 111

Multiple Choice

Use the following information for questions 110 and 111.
Equipment that cost $220,000 and has accumulated depreciation of $100,000 is exchanged for equipment with a fair value of $160,000 and $40,000 cash is received. The exchange lacked commercial substance.
-The new equipment should be recorded at

A) $160,000.
B) $120,000.
C) $100,000.
D) $96,000.