Brian Walker, owner of Carla Vista Estate Inc., buys and sells commercial properties. Recently, he sold land for $2,860,000 to the Pharoah Group, a developer that plans to build a new shopping mall. In addition to the $2,860,000 sales price, Pharoah Group agrees to pay Carla Vista Estate Inc. 1% of the retail sales of the mall for 10 years. Pharoah estimates that retail sales in a typical mall project is $1,040,000 a year. Given the substantial increase in online sales that are occurring in the retail market, Brian had originally indicated that he would prefer a higher price for the land instead of the 1% future-sales-based arrangement and suggested a price of $3,119,000. However, Pharoah would not agree to those terms. What is the transaction price for the land and related royalty payment that Carla Vista Estate Inc. should record?

Brian Walker, owner of Carla Vista Estate finc, buys and sells commercial propecties. Recently, the sold land for $2,860,000 to the Pharoah Group, a developer that plans to build a new shopping malL In addition to the $2,860,000 sales price, Pharoah Group agrees to pay Carla Vista Estate inc. 1K of the retail sales of the mall for 10 years. Pharoah estimates that retail sales in a typical mall project is $1,040,000 a year. Given the substantial increase in online sales that are occurring in the retail market, Erian had originally indicated that he would prefer a higher price for the land instead of the 1% future-sales-based arrangement and suggested a price of \$3,119,000. However, Pharoah would not agree to those terms