A Building with an Appraisal Value of $154,000 Is Made

question 221

Multiple Choice

A building with an appraisal value of $154,000 is made available at an offer price of $172,000. The purchaser acquires the property for $40,000 in cash, a 90-day note payable for $45,000, and a mortgage amounting to $75,000. The cost basis recorded in the buyer's accounting records to recognize this purchase is

• A) $154,000
• B) $172,000
• C) $160,000
• D) $120,000

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Definitions:

UCC

The Uniform Commercial Code encompasses a wide-ranging assortment of laws that control the entirety of commercial transactions within the United States.

Real Estate Mortgages

Real Estate Mortgages are legal agreements in which a borrower pledges real property to a lender as security for a loan, with the condition that the conveyance of title becomes void upon payment.

Trust Deeds

Legal documents that signify an agreement where property is held by a trustee as security for a loan until the borrower pays back the loan in full.

Security Interests

A legal claim or right granted over an asset to secure the performance of an obligation, typically the repayment of a loan.