Question: In January 2014, Bevis Company exchanged an old machine, with a book value of $256,000 and a fair value of $260,000, and paid $40,000 cash

In January 2014, Bevis Company exchanged an old machine, with a book value of $256,000 and a fair value of $260,000, and paid $40,000 cash for a similar used machine having a fair value of $300,000. The exchange lacked commercial substance. At what amount should the machine acquired in the exchange be recorded on Bevis' books?

$256,000

$296,000

$300,000

$304,000

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