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year-end 2004 have not been issued. How should the settlement be
reported in Ace's year-end 2004 financial statements?
Question 4
When should a lessor recognize in income a nonrefundable lease bonus
paid by a lessee on signing an operating lease?
Question 5
In a sale-leaseback transaction, a gain resulting from the sale should be
deferred at the time of the sale-leaseback and subsequently amortized
when I. The seller-lessee has transferred substantially all the risks of
ownership. II. The seller-lessee retains the right to substantially all of the
remaining use of the property.
Question 6
The following information pertains to a sale and leaseback of equipment
by Mega Co. on December 31, 2005: What amount of deferred gain on
the sale should Mega report at December 31, 2005?
Question 7
On August 1, 2005, Metro, Inc. leased a luxury apartment unit to Klum.
The parties signed a 1-year lease beginning September 1, 2005 for a
$1,000 monthly rent payable on the first day of the month. At the August
1 signing date, Metro collected $540 as a nonrefundable fee for allowing
Klum to sign a 1-year lease (the normal lease term is three years) and
$1,000 rent for September. Klum has made timely payments each month,
but prepaid January's rent on December 20. In Metro's 2005 income
statement, rent revenue should be reported as
Question 8