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On January 1, 2018, Laramie Inc. acquired land for $6.2 million. Laramie paid $1.2 in...

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Accounting

On January 1, 2018, Laramie Inc. acquired land for $6.2 million. Laramie paid $1.2 in cash and signed a 6% note requiring the company to pay the remaining $5 million plus interest on December 31, 2019. An interest rate of 6% properly reflects the time value of money for this type of loan agreement. For what amount should Laramie record the purchase of land?

Multiple Choice

$6.8 million.

$5.0 million.

$5.6 million.

$6.2 million.

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