If the Bean Company sells an asset to Corn Company for a pro
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If the Bean Company sells an asset to Corn Company for a profit of $175,000 and immediately leases it back with a capital lease, the gain is recognized by Bean:
immediately as an extraordinary gain.
immediately as an ordinary gain.
over the life of the lease in proportion to the rental payment.
over the life of the lease using the same rate and life used to amortize the leased asset.
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Solution Summary
If the Bean Company sells an asset to Corn Company for a profit of $175,000 and immediately leases it back with a capital lease, the gain is recognized by Bean:
immediately as an extraordinary gain.
immediately as an ordinary gain.
over the life of the lease in proportion to the rental payment.
over the life of the lease using the same rate and life used to amortize the leased asset.
Purchase this Solution
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