Investments And Sale Leaseback, TS

Question 0

How is the following treated?

Investment securities transferred from trading to available for sale

Answer 0

Do not reverse unrealized gain/loss previously recognized in

Income

Question 1

How is the following treated?

Investment securities transferred from trading to held to maturity

Answer 1

Do not reverse unrealized gain/loss previously recognized in
Income

Question 2

How is the following treated?

Investment securities transferred from available for sale to held to maturity

Answer 2

Report unrealized gain/loss as separate component of stockholder’s
Equity

And amortize of remaining life of security

Question 3

How is the following treated?

Investment securities transferred from available for sale to trading

Answer 3

Recognize unrealized gain/loss immediately

Question 4

How is the following treated?

Investment securities transferred from held to maturity to available for sale

Answer 4

Report unrealized gain/loss as separate component of stockholder’s equity

Question 5

How is the following treated?

Investment securities transferred from held to maturity to trading

Answer 5

Recognize unrealized gain/loss immediately

Question 6

Sales type capital lease:

Lessor has 2 profits derived from this transaction

Answer 6

1 gain or loss on sale (lease) of asset

2 interest income from collection of lease payment

Question 7

Lessor vs lessee

Answer 7

Lessor owns the property

Lessee rents the property from the lessor

Question 8

Lessor direct financing capital lease:

The lessor has what from the collection of the lease payment?

Answer 8

Lessor has only interest income from collection of the lease payment

Question 9

Sale leaseback define

Answer 9

Property is sold by owner and immediately leased (operating or
Capital) back to owner

Question 10

Under a sale leaseback the original owner/seller never…

Answer 10

Gives up possession or use of property

Question 11

Minor lease (sale leaseback criteria)

Answer 11

If present value of future lease payments is less than 10% of
FMV of property just sold (use sale price)

Question 12

Major lease (sale leaseback criteria)

Answer 12

If present value of future lease payments is more than 10% of
FMV of property just sold (use sale price)

Question 13

Minor lease (back) is…

Answer 13

Not a sale leaseback

Question 14

Major lease (back) is…

Answer 14

A sale leaseback

Question 15

When a leaseback is minor (less than 10% of FMV) and there is a loss on sale…2

Answer 15

1 Recognize entire loss in year of sale

2 Record rent expense for each payment

Question 16

When a leaseback is minor (less than 10% of FMV) and there is a gain on sale…2

Answer 16

1 recognize entire gain in year of sale

2 record rent expense for each payment

Question 17

When a leaseback is major (more than 10% of FMV) and there is a loss on sale…

Answer 17

Recognize entire loss in year of sale

Question 18

When a leaseback is major (more than 10% of FMV) and there is a gain on sale…2

Answer 18

1 Defer gain up to present value of lease liability

2 amortize gain as offset (reduction)

Question 19

When a leaseback is major (more than 10% of FMV) and there is a gain on sale, what is the treatment of an operating leaseback?

Answer 19

Amortize deferred gain on sale as offset to rent expense to be
Paid in future

Question 20

When a leaseback is major (more than 10% of FMV) and there is a gain on sale, what is the treatment of an capital leaseback?

Answer 20

Amortize deferred gain on sale as offset to depreciation expense
On capitalized asset that original owner/seller owns again

Question 21

Exception to gain recognition on sale leaseback, entire gain should be recognized when…

Answer 21

Lease term is 10% or less of remaining useful life of leased asset

Question 22

What is the journal entry to reissue stock for more cash under the par value method?

Answer 22

Cash. Xxx
T/S. Xxx
PiC. Xxx

Question 23

What is the journal entry to reissue stock for less cash under the par value method?

Answer 23

Cash. Xxx
T/S. Xxx
PiC. Xxx

Question 24

What is the journal entry to reissue stock for more cash under the cost method?

Answer 24

Cash. Xxx
T/S. Xxx
PiC- T/S transactions. Xxx

Question 25

What is the journal entry to reissue stock for less cash under the cost method?

Answer 25

Cash. Xxx
R/E. Xxx
T/S. Xxx