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In October XXXX Allen Company exchanged a used packaging machine, having a book value of $120,000 for a dissimilar new machine and paid cash difference

In October XXXX Allen Company exchanged a used packaging machine, having a book value of $120,000 for a dissimilar new machine and paid cash difference of $15,000. The market value of the used packaging machine was determined to be $140,000. In its income statement for the year ended December 31,XXXX, how much gain should Allen recognize on this exchange?

a. $0 b. $5,000 c. $15,000 d. $20,000

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