O&V Sold a Business Asset with a $78,300 Adjusted Tax

Multiple Choice

O&V sold a business asset with a $78,300 adjusted tax basis for $100,000. The purchaser paid $30,000 in cash and gave O&V a note for the $70,000 balance of the price. O&V will not receive a payment on the note until next year. Compute O&V's gain recognized under the installment sale method.

A) $7,690
B) $6,510
C) $4,920
D) None of these choices are correct