On January 1, 2010, Fishbone Corp sold a building that cost $250,000 and had accumulated depreciation of 100,000 on the day of the sale. Fishbone received as consideration a 240,000 noninterest-bearing note due on January 1, 2013.
There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type in January 1, 2010 was 9%. At what amount should the gain from the sale of the building be reported?© BrainMass Inc. brainmass.com June 4, 2020, 12:20 am ad1c9bdddf
Given facts surrounding the sale of a building in return for a non-interest bearing note, this solution illustrates how to compute the gain on the sale.