Question
On January 1, 2015, Jantzen Company sold land to Dansko Company. There was no established market price for the land. Dansko gave Jantzen a CHF2,400,000
On January 1, 2015, Jantzen Company sold land to Dansko Company. There was no established market price for the land. Dansko gave Jantzen a CHF2,400,000 Zerointerest- bearing note payable in three equal annual installments of CHF800,000 with the first payment due December 31, 2015. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a CHF2,400,000 note payable in three equal annual installments of CHF800,000 at a 10% rate of interest is CHF1,989,600. The note will be reported on Danskos 2015 statement of financial position at a carrying value of
a. CHF1,989,600
b. CHF2,126,400
c. CHF2,188,560
d. CHF2,400,000
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