On January 1, 2024, Michelson & Sons acquired a tract of land just outside the city limits. The land and existing building were purchased for $2.54 million. Michelson paid $400,000 and signed a noninterest-bearing note requiring the company to pay the remaining $2,140,000 on December 31, 2024. An interest rate of 7% properly reflects the time value of money for this type of loan agreement. Transfer taxes, title insurance, and other costs totaling $24,000 were paid at closing. The old building was demolished at a cost of $120,000, and an additional $100,000 was paid to clear and grade the land.

What is the cost of the land?

Question 24 options:

$2,564,000

$2,784,000

$2,644,000

$2,424,000