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C is corrent. The problem states that the sale has been consummated and that Kame’s initial and continuing investments are adequate to demonstrate a commitment to pay for the property. However, the fact that Esker’s receivable is subject to future subordination precludes recognition of the profit in full. Instead, the cost recovery method must be used to account for the sale.
A is incorrect.  The full accrual method may be used only if profit on the sale is determinable, the earning process is virtually complete, and all of the following:
B is incorrect. The deposit method is to be used


D is incorrect. The reduced profit method is used only when the initial investment is adequate to demonstrate a commitment to pay for the property but the continuing investments are not. The continuing investments must also meet certain additional requirements for the reduced profit method to be used. Since Kame’s continuing investments are adequate, the reduced profit method will not be used to account for the sale.