Sandhill Company sells land with a book value of $165625 to Teal Mountain Corp. in exchange for a $265000 zero-interest-bearing note payable in 3 years. The market rate of interest for a transaction of this nature for Teal Mountain is 8%. To which of the following is the amount of the notes receivable less the unamortized discount at the time of the sale closest? The present value of 1 at 8% for 3 years is 0.7938 and the present value of an ordinary annuity of 1 at 8% for 3 years is 2.5771. O $210357 O $131473 O $426832 O $265000

Sandhill Company sells land with a book value of $165625 to Teal Mountain Corp. in exchange for a $265000 zero-interest-bearing note payable in 3 years. The market rate of interest for a transaction of this nature for Teal Mountain is 8%. To which of the following is the amount of the notes receivable less the unamortized discount at the time of the sale closest? The present value of 1 at 8% for 3 years is 0.7938 and the present value of an ordinary annuity of 1 at 8% for 3 years is 2.5771. O $210357 O $131473 O $426832 O $265000

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

Sandhill Company sells land with a book value of $165625 to Teal Mountain Corp. in exchange for a $265000 zero-interest-bearing
note payable in 3 years. The market rate of interest for a transaction of this nature for Teal Mountain is 8%. To which of the following is
the amount of the notes receivable less the unamortized discount at the time of the sale closest? The present value of 1 at 8% for 3
years is 0.7938 and the present value of an ordinary annuity of 1 at 8% for 3 years is 2.5771.
O $210357
O $131473
O $426832
O $265000

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