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What amount of interest income should be included in melanie

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Problem 1: On January 1, 20x4, Melanie Co. sold a building which had a carrying amount of ?350,00 receiving a ?125,000 down payment and, an additional consideration a ?400,000 noninterest bearing note due on January 1, 20x7. 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 at January 1, 20x4 was 10%. The present value of 1 at 10% for three periods is 0.75. what amount of interest income should be included in Melanie's 20x4 income statement?

a. 0

b. 30,000

c. 35,000

d. 40,000

Reference no: EM132836615

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