On January 1, 2011, Crabb & Co. sold land to Chiles, Inc. in exchange for a note with a maturity value of $500,000. The note is due December 31, 2013 and interest is owed each December 31 at a rate of 6%. Chiles' market rate of borrowing is 12%. Crabb originally purchased the land for $80,000 in 1978.
What is the fair market value of the land?
What is the amount of interest income recognized by Crabb & Co. in 2012?
What is the amount of cash interest received by Crabb & Co. in 2012?
Please show me how to calculate these questions.