Illustrate at what amount the land should be recorded

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Reference no: EM13127101

On January 1, 2013, Spartan Inc. purchased land that had an assessed value of $390,000 at the time of purchase. A $600,000, zero-interest-bearing note due January 1, 2016, was given in exchange. There was no established exchange price for the land, nor a ready fair value for the note. The interest rate charged on a note of this type is 12%. Determine at what amount the land should be recorded at January 1, 2013, and the interest expense to be reported in 2013 related to this transaction.

Reference no: EM13127101

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