39. W sold a residence for $40,000 payable as follows: Cash down payments $ 8,000 Existing loan assumed by buyer 20,000 Promissory note bearing interest ath percent, payable to W in two years 12,000 No payments were made on the promissory note during the year of sale. Assuming W's basis is $30,000, how much gain is recognized by W in the year of sale? Ignore selling costs. a. $2,000 b. $4,000 c. $7,000 d. $10,000