On January 1, 2011, Crabb & Co. sold land to Chiles, Inc. in exchange for a note with a maturity value of $500,000. The note is due December 31, 2013 and interest is owed each December 31 at a rate of 6%. Chiles market rate of borrowing is 12%. Crabb originally purchased the land for $80,000 in 1978. Answer the following. Show your work. 1. Was the note issued at a discount or a premium? 2. What is the fair market value of the land? 3. What is the gain or loss on the sale of the land? 4. How does this transaction affect the accounting equation of Crabb & Co. (Assets = Liabilities + Equity)? 5. What is the amount of interest income recognized by Crabb & Co. in 2012? 6. What is the amount of cash interest received by Crabb & Co. in 2012? 7. What is the carrying value of the note receivable on December 31, 2012?