The following information relates to an exchange of assets by Wharton Company. The exchange lacks commercial substance.     Old Equipment     Book Value Fair Value Cash Paid Case I $75,000 $85,000 $15,000 Case II $50,000 $45,000 $7,000   For Case I, Wharton records the equipment at $ Answer    on its books and reports a gain or (loss) of $ Answer    on the exchange.

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