As of December 31, 2014, a machine that originally cost $600,000 and has annual depreciation of $100,000 and has accumulated depreciation of $450,000. On April 1, 2015, when the machine has a fair value of $137,500, it is exchanged for a machine with a fair value of $675,000 and the proper amount of cash is paid. The exchange has commercial substance.

___ 1.	The gain to be recorded on the exchange is
	A)	$0.
	B)	$12,500
	C)	$25,000
	D)	$75,000
	E)	Some other answer than those shown above.