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$($Unless instructed otherwise, round answers to the nearest dollar. Interest rates are per annum unless

otherwise indicated.$)$

P$5\mathrm{.}1($LO $2,4)$ Groupwork $($Various Time Value Situations$)$ Answer each of these unrelated

questions.

a$.$ On January $1,2025,$ Fishbone Corporation sold a building that cost $$250,000$ and that had accumu$-$

lated depreciation of $$100,000$ on the date of sale. Fishbone received as consideration a $$240,000$

non$-$interest$-$bearing note due on January $1,2028.$ There was no established exchange price for the

building, and the note had no ready market. The prevailing rate of interest for a note of this type on

January $1,2025,$ was $9\%.$ At what amount should the gain from the sale of the building be reported?

b$.$ On January $1,2025,$ Fishbone Corporation purchased $300$ of the $$1,000$ face value, $9\%,10-$year bonds

of Walters Inc. The bonds mature on January $1,2035,$ and pay interest annually beginning January

$1,2026.$ Fishbone purchased the bonds to yield $11\%.$ How much did Fishbone pay for the bonds?

c$.$ Fishbone Corporation bought a new machine and agreed to pay for it in equal annual installments

of $$4,000$ at the end of each of the next $10$ years. Assuming that a prevailing interest rate of $8\%$

applies to this contract, how much should Fishbone record as the cost of the machine?L

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