Sparkman Co. filed a bankruptcy petition and liquidated its noncash assets. Sparkman was paying forty cents on the dollar for unsecured claims. Bailey Co. held a mortgage of $150,000 on land that was sold for $110,000. The total amount of payment that Bailey should have received is calculated to be

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Bailey Co. should have received 40% of the remaining amount of the mortgage after the sale of the land. The remaining amount is $150,000 - $110,000 = $40,000. Therefore, Bailey should have received $40,000 x 40% = $16,000. Adding this to the sale price of the land, Bailey should have received a total payment of $110,000 + $16,000 = $126,000.