On January 1,2013,Pastel Colors Corporation Purchased Drilling Equipment for $11,500

Multiple Choice

On January 1,2013,Pastel Colors Corporation purchased drilling equipment for $11,500.The equipment has an estimated useful life of four years and a salvage value of $200.Assuming that Pastel Colors uses the straight-line method of depreciation,if it trades the equipment for new equipment with a list price of $15,500 on December 31,2014,and pays $4,050 in the exchange,assuming the exchange lacks commercial substance,the new equipment should be recorded at

A) $15,500.
B) $11,450.
C) $9,850.
D) $9,900.