Malfoy Corporation recently traded a car for equipment. The car had an original cost of $45,000 and had an accumulated depreciation of $24,000. The car had a fair value of $20,000. The fair value of the new equipment was $35,000. Malfoy Corporation also paid $10,000. The transaction had commercial substance.

1. Did Malfoy Corporation have a gain or loss on the exchange?

2. What is the amount of the gain or loss on the exchange

3. What will be the amount recorded by Malfoy for the new equipment?

4. Assume the same facts except that the transaction did not have commercial substance. What would be the amount recorded for the new equipment by Malfoy?