This year, the company sold land for a non-interest-bearing note. The note calls for annual payments of $25,000 for 4 years. The payments will begin one year from the date of the sale. An appropriate rate of interest for this type of note is 8%. The land had an original purchase cost of $90,000. The CFO told the accounting department to record the sale as follows: Notes Receivable $100,000, Land $90,000, Gain on Sale of Land $10,000. Was this entry correct? If not, provide the correct entry.
A. Correct
B. Incorrect
C. Partially correct
D. Not enough information provided