Historical Cost Question

CFA Level I FRA
#1

Three years ago, a company borrowed $20,000 to finance the purchase of a machine that cost $60,000. Given that the company uses historical cost to measure its assets and has charged accumulated depreciation of $10,000 over the 3 years, which of the following statements is most likely?

The company will report:

A)A gross asset of $30,000.

B)A liability of $20,000.

C)An asset of $60,000

The answerr is B. Can anyone explain to me why C is wrong

#2

The asset value (often known as the net asset value) is $50,000.

#3

As you know,

1.original cost of a machine : $60,000 ← Positive to asset value 2.accumulated depreciation of $10,000 over the 3 years ← Negative to asset value 3.Thus, on the current balance sheet, (1) asset $50,000 (due to &60,000 - $10,000) → C is wrong (2) liabilitiy $20,000 → B is correct

Good luck.