Martinez Industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2: These assets were purchased as a lump sum for $250,000 cash. The following information was gathered. Initial Cost on Description Seller's Books Depreciation to Date on Seller's Books Book Value on Seller's Books Appraised Value Machinery $250,000 $125,000 $125,000 Equipment 150,000 25,000 125,000 $225,000 75,000 Asset 3: This machine was acquired by making a $25,000 down payment and issuing a $75,000, 2-year, zero-interest-bearing note. The note is to be paid off in two $37,500 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $89,750.