The Bacon Company acquired new machinery with a price of $15,200 by trading in similar old machinery and paying $12,700. The old machinery originally cost $9,000 and had accumulated depreciation of $5,000. In recording this transaction, Bacon Company should record.

a loss = $1,500

Explanation:

Bacon Company paid $12,700 in cash and an old machinery with a $4,000 basis for this new equipment that had a price of $15,200.

Bacon's loss = (cash paid + old machinery basis) - purchase price

Bacon's loss = ($12,700 + $4,000) - $15,200 = $16,700 - $15,200 = $1,500