Johnson Inc. and C&K Company entered into an exchange of real property. Here is the information for the properties to be exchanged.

		Johnson			C&K
FMV	$	900,000		$	675,000
Adjusted tax basis		593,000			462,000
Mortgage		200,000			-0-

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Pursuant to the exchange, C&K paid $25,000 cash to Johnson and assumed the mortgage on the Johnson property. Compute C&K's gain recognized on the exchange and its tax basis in the property received from Johnson.

A) No gain recognized; $487,000 basis in Johnson property.

B) $200,000 gain recognized; $662,000 basis in Johnson property.

C) No gain recognized; $462,000 basis in Johnson property.

D) None of the choices are correct.