On December 31, Strike Company has decided to trade-in one of its batting cages for another one that has a cost of $567,013.00. The seller of the batting cage is willing to allow a trade-in amount of $39,784.50. The initial cost of the old equipment was $294,700.00 with an accumulated depreciation of $250,495.00. Depreciation has been taken up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss in a transaction with commercial substance?

Select the correct answer.

A. Loss of $4,420.50

B. Gain of $4,420.50

C. Gain of $39,784.50

D. Loss of $39,784.50