Lyle,Inc.,purchased certain plant assets under a deferred payment contract on December 31,2011.The agreement was to pay $20,000 at the time of purchase and $20,000 at the end of each of the next five years.The plant assets should be valued at

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The plant assets should be valued at $120,000, which is the total amount to be paid over the six-year period. However, since the payments are being made under a deferred payment contract, there is an imputed interest component to the transaction. Therefore, the assets should be valued at $120,000 less imputed interest, which represents the true cost of the assets to Lyle, Inc.

Lyle,Inc,purchased Certain Plant Assets Under a Deferred Payment Contract on December