If a parcel of land is offered for sale at $45,000, is assessed for tax purposes at $20,000, is considered by its purchasers to be worth $36,000, and is purchased for $34,000, the land should be recorded in the purchaser's books at

Question

Quizplus · Accepted Answer

The land should be recorded at the purchase price of $34,000, as this is the amount actually paid for the land. The assessed value for tax purposes and the opinion of the purchasers as to the value of the land are not relevant for recording the purchase in the purchaser's books. The asking price of $45,000 does not represent the actual value of the land since it was purchased for $34,000, and should not be used for recording purposes.

If a Parcel of Land Is Offered for Sale at $45,000