1. On January 1, Year 1, Michael Co. sold a property with a remaining useful life of 20 years to Wei Co. for $800,000. On the same date, Michael leased back the property from Wei for 2 years. The lease was properly classified by the two companies as an operating lease. Michael Co. is not sure how to recognize the $800,000 received from Wei Co. on January 1, Year 1.

Which section of the Accounting Standards Codification best helps Michael Co. determine how the initial proceeds of $800,000 received from Wei Co. (buyer-lessor) are recognized?

2. On January 1, Year 1, Greg Co. leased an office building to Abby Co. The lease was properly classified by the two companies as an operating lease. The lease term is for 20 years and the estimated remaining useful life of the office building is 50 years. The controller of Greg Co. is not sure whether Greg Co. should test the office building for impairment while it is leased to Abby Co.

Which section of the Accounting Standards Codification best helps the controller of Greg Co. determine whether the office building is tested for impairment while it is leased to Abby Co.?

3. Zev Co. leased a property under a finance lease and incurred landscaping costs of $200,000 to improve it. The controller of Zev is not sure over what period the leasehold improvements should be amortized.

Which section of the Accounting Standards Codification best describes the amortization period for the leasehold improvements?

Enter your response in the answer fields below. Guidance on correctly structuring your response appears above and below the answer fields. Unless specifically requested, your response should not cite implementation guidance.

Hint: Some examples of correctly formatted FASB ASC responses are 205-10-05-1, 323-740-S25-1, 260-10-60-1A, 715-30-35-95, 820-10-35-16BB, 810-10-55-205AE, 815-10-50-4EEE, and 815-10-50-4EEEE

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