Kassim Company Purchased an Asset by Paying $35,000 Cash and Giving

Multiple Choice

Kassim Company purchased an asset by paying $35,000 cash and giving the seller its 3-year note for $240,000. Which of the following statements is true?

A) Kassim's book basis and tax basis in the asset is $275,000.
B) Kassim's book basis is $275,000, but its tax basis is $35,000.
C) Kassim's book basis and tax basis in the asset is $35,000.
D) If Kassim is a cash basis taxpayer, its initial tax basis in the asset is zero.