QUESTION 28

1. Townsend traded a building for a similar building. Townsend also paid $5,800 as part of the transaction. The book value of the building was $89,800, while its fair value was $101,300. The trade lacks commercial substance. Townsend would record the new building and a gain/(loss) of:

   	Building				Gain/(loss)
   a.	$	107,100			$	0
   b.	$	107,100			$	11,500
   c.	$	95,600			$	0
   d.	$	95,600			$	11,500

   	A.	Option C.
   	B.	Option A.
   	C.	Option B.
   	D.	Option D.