5. On January 1, 2021, Kane Ltd. purchased a house with a tax assessment value of$590,000 in exchange for an $800,000, zero-interest-bearing note due on January 1,2027. The house had not been appraised recently, nor did the note have a market value.The banks interest rate for this type of transaction and risk characteristics was 5.75%.Kane Ltd. intends to use the entire house as their main office.

Required:

a. What is the carrying value of the note payable on December 31, 2021?