On January 1, 2013, Pastel Colors Corporation purchased drilling equipment for $11,500. The equipment has an estimated useful life of four years and a salvage value of $200. Assuming that Pastel Colors uses the straight-line method of depreciation, if it trades the equipment for new equipment with a list price of $15,500 on December 31, 2014, and pays $4,050 in the exchange, assuming the exchange lacks commercial substance, the new equipment should be recorded at

Question 5 options:

	$15,500.
	$11,450.
	$9,850.
	$9,900.