I know the answer is C, but I dont know why.

Please correct me.

When the exchange lacks commercial substance...

If a FV of asset exchanged is higher then BV of asset exchanged we use the lower of two to compute cost basis of asset received. Am I wrong? So in this case we would use BV of $79800 (which is lower than FV of $84000) plus cash we gave up.

But I dont know why for This case its not right.

Cause we use FV to compute cost of asset we received + cash=357000

107. On December 1, 2017, Kelso Company acquired new equipment in exchange for old equipment that it had acquired in 2014. The old equipment was purchased for and had a book value of $79,800. On the date of the exchange, the old equipment had a fair value of $84,000. In addition, Kelso paid $273,000 cash for the new equipment, which had a list price of $378,000. The exchange lacked commercial substance. At what amount should Kelso record the new equipment for financial accounting purposes? a. $273,000. b. $352,800. c. $357,000. d. $378,000