Taft Inc. borrowed $1,000,000 from Wilson Company on July 2, 2004. As part of the loan agreement, Taft granted Wilson a security interest in land that originally cost $750,000 when it was acquired by Taft in 1997. The land had a fair value of $900,000 on July 2, 2004. In June 2006, Taft defaulted on its loan to Wilson, and the land was transferred to Wilson in full settlement of the debt on June 30. The land had a fair value of $950,000 on June 30, 2006. In accordance with SFAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, what amount should Wilson record for land on June 30, 2006?

  1. $0.
  2. $750,000.
  3. $900,000.
  4. $950,000.