Question: John borrowed $4,500 to purchase a machine. He later borrowed $2,000 using the machine as collateral. Both notes are nonrecourse. Ten years later, the machine

John borrowed $4,500 to purchase a machine. He later borrowed $2,000 using the machine as collateral. Both notes are nonrecourse. Ten years later, the machine has an adjusted basis of zero and two outstanding not balances of $2,500 and $800. John sells the machine subject to the two liabilities for $1,000. What is his realized gain or loss? a. None of the above. b. $4,300 c. $0. d. $3,300. e. $1,000.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Recher Corporation uses part Q89 in one of its products. The company's Accounting Department reports the following costs of producing the 7,100 units of the part that are needed every year. Per Unit...

Jack borrowed $4,500 to purchase a machine. He later borrowed $2,000 using the machine as collateral. Both notes are nonrecourse. Ten years later, the machine has an adjusted basis of zero and two...

Tyler borrowed $15,000 to purchase a machine. He later borrowed $3,000 using the machine as collateral. Both notes are nonrecourse. Ten years later, the machine has an adjusted basis of zero and two...

10-13 please 10. Pedro borrowed S36,000 to purchase a machine. He later borrowed $10,000 using the machine collateral Both notes are secourse Eight years later, the machine has an adjusted ha ofrete...

22. Rick borrows $50,000 to purchase a machine. He later borrows $40,000 using the machine as collateral. The first note is recourse, the second note is nonrecourse. Seven years later, the machine...

It is becoming widely expected that interest rates will rise in the coming year. In recent weeks the 10 year US bond has risen from about 1.50% to 1.80%. Using the appendix for chapter 2 on Webster...

Read the following sample life insurance policy: Whole Life Complete the worksheets for each sample policy. Whole Life Policy Worksheet FIN/428 Version 1 University of Phoenix Material Sample Whole...

John borrowed $4,500 to purchase a machine. He later borrowed $2,000 using the machine as collateral. Both notes are nonrecourse. Ten years later, the machine has an adjusted basis of zero and two...

1. Who were the non-customers Marvel targeted? 2. There are several attempts to explain Marvels Success via competitive strategy but they fall flat: competitive strategy, with this specific case...

2. [4 marks] Analyse the business model of Goldman Sachs in 2006. a. What were the main business areas in 2006? b. Provide in your words a brief description (max 10 lines) of what each area does. If...

Henk Ltd owns all the share capital of Hilboro Ltd. The income tax rate is 30%. The following transactions took place during the periods ended 30 June 2019 or 30 June 2020. (a) On 1 May 2019, Hilboro...

Prove that, for any linear function f(x) of a random variable x, no matter what its p.d.f.p(x), it must be true that = f(). Saying f(x) is linear means f(x) = ax + b where a and...

When you are creating a project, what does the option "New from existing project" do ?

How does the tool (CVP) analysis contribute to enhance the process of value creation? Be specific about which element or elements are impacted by the use of the tool.

Navigate to the Discussion page and answer selected debates question. a. Debate 9-1, Capitalization of Interest b. Debate 10-3, The Fair Value Option

1. How does CVP analysis contribute to increasing the quality of decisions? 2. What is your interpretation of operating leverage? Is it relevant? Can you estimate it from a traditional GAAP...

Write a report on History of Gas Turbine Engines.

Write briefly note about COVID-19: A Narrative of How it is Being Portrayed in the Media, Politics and the Medical Community in Comparison to Previous Pandemics.

Reflecting back on the conversation to signal you feel the business is complete is which stage of the conversation process? Question 4 options: D ) business A ) feedforward C ) opening B ) feedback

List the four parts of the self-motivation model.

Define the following 16 key terms throughout the chapter identified in bold with their definition in italic.

Identify the four parts of the model for writing objectives.