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  1. business
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  3. a) this year, the company sold land for a non-inte

a) This year, the company sold land for a non-interest bearing note. The note calls...

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Accounting

a) This year, the company sold land for a non-interest bearing note. The note calls for annual payments of $20,000 for 5 years. The payments will begin one year from the date of the sale. An appropriate rate of interest for this type of note is 4%. The land had an original purchase cost of $90,000. The CFO told the accounting department to record the sale as follows:

Notes Receivable $100,000

Land $90,000

Gain on Sale of Land $ 10,000

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