When firms dispose of a long-lived asset by selling it before the end of its useful life, the difference between the net book value of the asset and the disposition proceeds is a/an:

Multiple Choice

• cost of goods gain or loss.

• gain or loss from a discontinued item.

• gain or loss from continuing operations.

• gain or loss from a prior period.

Corona Industries purchased a stamping machine on January 2, 20X1, for $100,000. It made an initial payment of $20,000 and financed the balance over 5 years at State Bank. The loan terms were for annual payments of $16,000 plus 10% interest, payable on December 31 each year. The year 20X4 proves to be a difficult year and on December 1, 20X4 Corona negotiates a debt restructuring with State Bank. The settlement calls for cash payment of accrued interest plus $4,000 on December 1 and the transfer of 200 acres of land held by Corona that cost $15,000. The land has a current fair value of $22,000.

On December 1, 20X4, how much interest is accrued on this loan?

Multiple Choice

• $6,933

• $3,200

• $2,933

• $18,933