Two independent companies, Concord Co. and Ivanhoe Co., are in the home building business. Each owns a tract of land held for development, but each would prefer to build on the other's land. They agree to exchange their land. An appraiser was hired, and from her report and the companies' records, the following information was obtained:

		Concord's Land		Ivanhoe's Land
Cost and book value		$546000		$365000
Fair value based upon appraisal		726000		641000

The exchange was made, and based on the difference in appraised fair values, Ivanhoe paid $85000 to Concord. The exchange lacked commercial substance. The new land should be recorded on Ivanhoe's books at

$620000.

$365000.

$450000.

$705000.