A Company Bought New Heating System for $42,000 and Was

Multiple Choice

A company bought new heating system for $42,000 and was given a trade-in of $2,000 on an old heating system, so the company paid $40,000 cash with the trade-in. The old system had an original cost of $37,000 and accumulated depreciation of $34,000. If the transaction has commercial substance, the company should record the new heating system at:

A) $43,000.
B) $40,000.
C) $2,000.
D) $42,000.
E) $3,000.