What is the capitalized cost of the land and the discount

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Point 1: Sadeas Inc. purchased raw land in an area expected to be heavily developed in the next five years. Because of the uncertainty of the extent and timing of development and lack of similar sales nearby, the fair value of the land is unknown. Sadeas purchased the land with a noninterest-bearing bearing note payable for $250,000. Note payments of $50,000 are to be made at the end of each year for five years. The company paid $3,000 for a title search, $15,000 for past due property taxes, and $2,000 in debt issuance fees, with cash. The borrowing rates for loans with similar terms is 5%.

Question 1: What is the capitalized cost of the land and the Discount on Note payable, respectively?

Reference no: EM132506855

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