Question 18 (8 points) Question 18 options: St. Paulie Inc. has equipment with an original cost of $60,000 and accumulated depreciation of $40,000. This equipment was traded in for new equipment equipment with a price of $70,000. The old equipment had a fair value of $25,000. St. Paulie is given a trade in allowance of $28,000 and pays $42,000 cash for the new equipment. This transaction does not have commercial substance.

Is there a gain or a loss on this trade? (type gain or type loss) What is the amount of the gain/loss? ( do not include dollar signs, commas, or decimals points in your answer)

At what amount is the new piece of equipment recorded? (do not use dollar signs, commas, or decimals in your answer) Assume the same transaction but it does have commercial substance. At what amount would the new piece of equipment be recorded? (do not use dollar signs, commas or decimals in your answer)