On January 1, 2015, Jantzen Company sold land to Dansko Company. There was no established market price for the land. Dansko gave Jantzen a CHF2,400,000 Zerointerest- bearing note payable in three equal annual installments of CHF800,000 with the first payment due December 31, 2015. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a CHF2,400,000 note payable in three equal annual installments of CHF800,000 at a 10% rate of interest is CHF1,989,600. The note will be reported on Dansko's 2015 statement of financial position at a carrying value of a. CHF1,989,600 b. CHF2,126,400 c. CHF2,188,560 d. CHF2,400,000

On January 1, 2015, Jantzen Company sold land to Dansko Company. There was no established market price for the land. Dansko gave Jantzen a CHF2,400,000 Zerointerest- bearing note payable in three equal annual installments of CHF800,000 with the first payment due December 31, 2015. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a CHF2,400,000 note payable in three equal annual installments of CHF800,000 at a 10% rate of interest is CHF1,989,600. The note will be reported on Dansko's 2015 statement of financial position at a carrying value of a. CHF1,989,600 b. CHF2,126,400 c. CHF2,188,560 d. CHF2,400,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On January 1, 2015, Jantzen Company sold
land to Dansko Company. There was no
established market price for the land. Dansko
gave Jantzen a CHF2,400,000 Zerointerest-
bearing note payable in three equal annual
installments of CHF800,000 with the first
payment due December 31, 2015. The note
has no ready market. The prevailing rate of
interest for a note of this type is 10%. The
present value of a CHF2,400,000 note
payable in three equal annual installments of
CHF800,000 at a 10% rate of interest is
CHF1,989,600. The note will be reported on
Dansko's 2015 statement of financial position
at a carrying value of
a. CHF1,989,600
b. CHF2,126,400
c. CHF2,188,560
d. CHF2,400,000

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