On January 1, Year 1, A Limited and B Inc. formed A\&B Co., a joint venture. B Inc. contributes cash $1,800,000 for its 60% interest in the venture. A Limited contributed a similar equipment with a carrying amount of $455,000 and a fair value of $800,000. A Limited received a 40% interest of A&B Co, only. The equipment has 10 years useful life when the asset was transferred to ABCCO. Which of the following statement is true? a. A Limited will need to defer the gain on transfer of $345,000 b. A Limited will need to defer the gain on transfer of $138,000 c. A Limited will report Investment in A\&B (net) $800,000 d. There is no commercial substance for this transfer