Investments And Sale Leaseback, TS Flashcards
How is the following treated?
Investment securities transferred from trading to available for sale
Do not reverse unrealized gain/loss previously recognized in
Income
How is the following treated?
Investment securities transferred from trading to held to maturity
Do not reverse unrealized gain/loss previously recognized in
Income
How is the following treated?
Investment securities transferred from available for sale to held to maturity
Report unrealized gain/loss as separate component of stockholder’s
Equity
And amortize of remaining life of security
How is the following treated?
Investment securities transferred from available for sale to trading
Recognize unrealized gain/loss immediately
How is the following treated?
Investment securities transferred from held to maturity to available for sale
Report unrealized gain/loss as separate component of stockholder’s equity
How is the following treated?
Investment securities transferred from held to maturity to trading
Recognize unrealized gain/loss immediately
Sales type capital lease:
Lessor has 2 profits derived from this transaction
1 gain or loss on sale (lease) of asset
2 interest income from collection of lease payment
Lessor vs lessee
Lessor owns the property
Lessee rents the property from the lessor
Lessor direct financing capital lease:
The lessor has what from the collection of the lease payment?
Lessor has only interest income from collection of the lease payment
Sale leaseback define
Property is sold by owner and immediately leased (operating or
Capital) back to owner
Under a sale leaseback the original owner/seller never…
Gives up possession or use of property
Minor lease (sale leaseback criteria)
If present value of future lease payments is less than 10% of
FMV of property just sold (use sale price)
Major lease (sale leaseback criteria)
If present value of future lease payments is more than 10% of
FMV of property just sold (use sale price)
Minor lease (back) is…
Not a sale leaseback
Major lease (back) is…
A sale leaseback
When a leaseback is minor (less than 10% of FMV) and there is a loss on sale…2
1 Recognize entire loss in year of sale
2 Record rent expense for each payment
When a leaseback is minor (less than 10% of FMV) and there is a gain on sale…2
1 recognize entire gain in year of sale
2 record rent expense for each payment
When a leaseback is major (more than 10% of FMV) and there is a loss on sale…
Recognize entire loss in year of sale
When a leaseback is major (more than 10% of FMV) and there is a gain on sale…2
1 Defer gain up to present value of lease liability
2 amortize gain as offset (reduction)
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?
Amortize deferred gain on sale as offset to rent expense to be
Paid in future
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?
Amortize deferred gain on sale as offset to depreciation expense
On capitalized asset that original owner/seller owns again
Exception to gain recognition on sale leaseback, entire gain should be recognized when…
Lease term is 10% or less of remaining useful life of leased asset
What is the journal entry to reissue stock for more cash under the par value method?
Cash. Xxx
T/S. Xxx
PiC. Xxx
What is the journal entry to reissue stock for less cash under the par value method?
Cash. Xxx
T/S. Xxx
PiC. Xxx
What is the journal entry to reissue stock for more cash under the cost method?
Cash. Xxx
T/S. Xxx
PiC- T/S transactions. Xxx
What is the journal entry to reissue stock for less cash under the cost method?
Cash. Xxx
R/E. Xxx
T/S. Xxx
