Endor Fishing Company Exchanged an Old Boat for a New

Multiple Choice

Endor Fishing Company exchanged an old boat for a new one.The old boat had a cost of $260,000 and accumulated depreciation of $200,000.The new boat had an invoice price of $400,000.Endor received a trade in allowance of $100,000 on the old boat,which meant they paid $300,000 in addition to the old boat to acquire the new boat.What amount of gain or loss should be recorded on this exchange? (The exchange lacks commercial substance.)

A) $0 gain or loss
B) $40,000 gain
C) $40,000 loss
D) $60,000 loss
E) $100,000 loss