On January 1,20x1, ABC co. Sold a tract of land that was acquired several years ago for 2,000,000. ABC co.received a non interesr bearing note for 4,000,000. The note is payable in equal annual installments of 500,000 every December 31, starting December 31,20x1. The market interest for similar note was 16%. What is the carrying amount of the note receivable on January 1,20x1? What amount should be recognized as gain on sale of land in 20x1? What is the carrying amount of the note receivable on December 31, 20x1?
On January 1,20x1, ABC co. Sold a tract of land that was acquired several years ago for 2,000,000. ABC co.received a non interesr bearing note for 4,000,000. The note is payable in equal annual installments of 500,000 every December 31, starting December 31,20x1. The market interest for similar note was 16%. What is the carrying amount of the note receivable on January 1,20x1? What amount should be recognized as gain on sale of land in 20x1? What is the carrying amount of the note receivable on December 31, 20x1?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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On January 1,20x1, ABC co. Sold a tract of land that was acquired several years ago for 2,000,000. ABC co.received a non interesr bearing note for 4,000,000. The note is payable in equal annual installments of 500,000 every December 31, starting December 31,20x1. The market interest for similar note was 16%. What is the carrying amount of the note receivable on January 1,20x1? What amount should be recognized as gain on sale of land in 20x1? What is the carrying amount of the note receivable on December 31, 20x1?
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