Jordan Company exchanged a used autograph-signing machine with Rodman Company for a similar machine with less use. Jordan's old machine originally cost $50,000 and had accumulated depreciation of $40,000, as well as a market value of $40,000, at the time of the exchange. Rodman's old machine originally cost $60,000 and at the time of the exchange had a book value of $30,000 and a market value of $32,000. Rodman gave Jordan $8,000 cash as part of the exchange. The exchange lacked commercial substance. Jordan should record the cost of the new machine at
A) $8,000.
B) $10,000.
C) $16,000.
D) $32,000.

Question

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The Answer of Jordan Company exchanged a used autograph-signing machine with Rodman Company for a similar machine with less use. Jordan's old machine originally cost $50,000 and had accumulated depreciation of $40,000, as well as a market value of $40,000, at the time of the exchange. Rodman's old machine originally cost $60,000 and at the time of the exchange had a book value of $30,000 and a market value of $32,000. Rodman gave Jordan $8,000 cash as part of the exchange. The exchange lacked commercial substance. Jordan should record the cost of the new machine at
A) $8,000.
B) $10,000.
C) $16,000.
D) $32,000.

Jordan Company Exchanged a Used Autograph-Signing Machine with Rodman Company