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During 2018, Ed sold machinery (AB $20,000; AD $15,000) for a total price of $100,000. Payments are to be made in five annual installments beginning
During 2018, Ed sold machinery (AB $20,000; AD $15,000) for a total price of $100,000. Payments are to be made in five annual installments beginning immediately. What is the amount and character of gain to be recognized by Ed in 2018 because of the sale?
Sec. 1245 Sec. 1231
a. $ 15,000 $ 65,000
b. $15,000 $13,000
c. $ 15,000 $ 5,000
d. $ 15,000 $ 20,000
e. None of the above
( The answer is B but I need an explanation and calculations for why, thank you)
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