Company X has a machine with a book value of $10,000 and a fair value of $15,000. Company Y has a machine with a book value of $10,000 and a fair value of $9,000. Company X and Y exchange machines. In addition, Company X gives $1,000 to Company Y as a result of the exchange. The transaction is deemed to lack commercial substance.

Assuming that the book value method is used, Company X would record:

		A. no gain or loss on this transaction
		B. a gain of $1,000 on this transaction
		C. a loss of $1,000 on this transaction
		D. a loss of $2,000 on this transaction