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This year, a company sold land for a non-interest bearing note. The note calls for annual payments of $20,000 for 5 years. The payments will

This year, a company sold land for a non-interest bearing note. The note calls for annual payments of $20,000 for 5 years. The payments will begin one year from the date of the sale. An Appropriate rate of interest for this type of note is 4%. The land had an original purchase cost of $90,000. The CFO told the accounting department to record the sale as follows:

DR: Notes Receivable 100,000

CR: Land 90,000

CR: Gain on Sale 10,000

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