1. When a company sells property and then leases it back, any gain on the sale should usually be?

deferred and recognized as income over the term of the lease.

recognized as a prior period adjustment.

recognized at the end of the lease.

recognized in the current year.

2. jamar Co. sold its headquarters building at a gain, and simultaneously leased back the building. The lease was reported as a finance lease. At the time of the sale, the gain should be reported as

a deferred gain.

Conceptual.

comprehensive income net of income tax.

a separate component of stockholders' equity.

operating income.

3. Which of the following would be included in the Lease Receivable account?

I.	Guaranteed residual value

II.	Unguaranteed residual value

III.	Executory costs

IV.	Rental payments

I and III only

4.

The amount to be recorded as the cost of an asset under a finance lease is equal to the

present value of the lease payments.

present value of the lease payments or the fair value of the asset, whichever is lower.

present value of the lease payments plus the present value of any unguaranteed residual value.

carrying value of the asset on the lessor's books.

5.

Which of the following best describes current practice in accounting for leases?

Leases are not capitalized.

All long-term leases are capitalized.

Leases similar to installment purchases are capitalized.

All leases are capitalized.

II, III, and IV

I and II only

I, II, and IV