Warren Peace Bookstore Issues a Note with No Stated Interest

Warren Peace Bookstore issues a note with no stated interest rate in exchange for a building. In accounting for the transaction:

A) If fair values of the note and building are unavailable, the note should be recorded at its face amount.
B) The note is recorded at its face amount unless the fair value of the building is readily available.
C) Both the note and building are recorded at the fair value of the note or the fair value of the building, whichever is more clearly determinable.
D) The building should be depreciated over the note's term to maturity.

Correct Answer:

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