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1. Equipment that cost $220,000 and has accumulated depreciation of $100,000 is exchanged for equipment with a fair value of $160,000 and $40,000 cash is

1. Equipment that cost $220,000 and has accumulated depreciation of $100,000 is exchanged for equipment with a fair value of $160,000 and $40,000 cash is received. The exchange lacked commercial substance.

A. The gain recognized from the exchange is

B. The new equipment is recorded at

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