Two independent situations follow.

Click here to view the factor table PRESENT VALUE OF $1.$

Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF $1.$

$($a$)$

On January $1,2023,$ Martinez Inc. bought land that had an assessed value of $$390,000$ at the time of purchase. A $$625,000,$ non$-$

interest$-$bearing note due on January $1,2026,$ was given in exchange. There was no established exchange price for the land and no

ready market value for the note. The interest rate that is normally charged on a note of this type is $10\%.$

Using $(1)$ factor tables, $(2)$ a financial calculator, or $(3)$ Excel function PV$,$ determine at what amount the land should be recorded at

January $1,2023.($Hint: Refer to Chapter $3$ for tips on calculating.$)$ Determine the interest expense to be reported in $2023$ related

to this transaction. $($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answer to $0$ decimal places e$.$g$.$

$58,971.)$

Cost of land to be recorded

Interest expense to be recorded