Question
Bowman Inc. purchased land on January 1, 2020, by issuing a three-year, $185,000 note, structured as a zero-interest-bearing note. The entire principal is payable December
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Bowman Inc. purchased land on January 1, 2020, by issuing a three-year, $185,000 note, structured as a zero-interest-bearing note. The entire principal is payable December 31, 2022. The market rate of 9% is implicit in this agreement.
What is the implied fair value of the land?
a. $185,000
b. $142,854
c. $171,296
d. $158,608
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Financial Accounting For Non Specialities
Authors: Peter Atrill, Eddie McLaney
2nd Edition
0139833625, 9780139833625
