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material. The financial statements for 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