Pedro Borrowed $45,000 to Purchase a Machine

Multiple Choice

Pedro borrowed $45,000 to purchase a machine.He later borrowed $15,000 using the machine as collateral.Both notes are nonrecourse.Eight years later,the machine has an adjusted basis of zero and two outstanding note balances of $30,000 and $6,000.Pedro sells the machine subject to the two liabilities for $21,000.What is his realized gain or loss?

A) $0.
B) $21,000.
C) $51,000.
D) $57,000.
E) None of the above.