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Heritage Co. traded equipment with an original cost of $100,000 and accumulated depreciation of $20,000 for a new piece of equipment with a fair value

Heritage Co. traded equipment with an original cost of $100,000 and accumulated depreciation of $20,000 for a new piece of equipment with a fair value of $90,000.In addition, Heritage Co. received $10,000 cash.

Assume the exchange has commercial substance.What should Heritage Co. record as the cost of the new asset?

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