Fredrico and Orqudea exchanged equipment in a qualifying like-kind exchange. Fredrico gives up equipment with an adjusted basis of $12,000 (fair market value of $15,000) in exchange for Orqudeas equipment with a basis of $12,000 and a fair market value of $13,000 plus $2,000 cash. How much gain should Fredrico recognize on the exchange and what is Orqudeas basis in the equipment received?

A. Fredricos Gain Orqudeas Basis $1,000 $15,000

B. Fredricos Gain Orqudeas Basis $2,000 $12,000

C. Fredricos Gain Orqudeas Basis $2,000 $14,000

D. Fredricos Gain Orqudeas Basis $3,000 $14,000

E. Fredricos Gain Orqudeas Basis $3,000 $12,000