A Company Purchased Property for $100,000

question 115

Multiple Choice

A company purchased property for $100,000.The property included a building,a parking lot and land.The building was appraised at $62,000; the land at $45,000 and the parking lot at $18,000.The value of the land that will be included in the accounting record is:

• A)$0
• B)$36,000
• C)$42,000
• D)$45,000
• E)$100,000

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Definitions:

Interest Revenue

Income earned from investments in interest-bearing assets like bonds, loans, and savings accounts.

Bargain Purchase Option

An option in a lease agreement that allows the lessee to purchase the leased asset at the end of the lease term for a price significantly lower than the expected fair market value.

Equipment Leased

Assets acquired for use over a specified period through a rental agreement, where ownership remains with the lessor.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, representing the wear and tear or obsolescence.